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PEARL JAM'S ANTITOUST COMPLAINT: QUESTIONS 
ABOUT CONCERT, SPORTS, AND THEATER 
TICKET HANDUNG CHARGES AND OIHER 
PRACTICES 

^Y 4. G 74/7: J 24 ^^ ^^^ 

Pearl Jan's Antitrust Conplaint: Qu... 

HEARING 

BEFORE THE 

INFORMATION, JUSTICE, TRANSPORTATION, 
AND AGRICULTURE SUBCOMMITTEE 

OF THE 

COMMITTEE ON 

GOVERNMENT OPERATIONS 

HOUSE OP REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 
SECOND SESSION 



JUNE 30, 1994 



F*rinted for the use of the Committee on CU)vermn6ia0frainBtt^ 

^^6 8 199b 




U.S. GOVERNfMENT PRINfTING OFFICE 
85-914 CC WASfflNGTON : 1995 

For sale by the U.S. Government Printing Office 
Superintendent of Documents, MaU Stop: SSOP, Washington, DC 20402-9328 
ISBN 0-16-047228-8 




tEARL JAM'S ANTITRUST COMPLAINT: QUESTIONS 
ABOUT CONCERT, SPORTS, AND THEATER 
TICKET HANDUNG CHARGES AND OTHER 
PRACTICES _____^_= 

Y 4. 5 74/7: J 24 ~ 



Pearl Jan's Antitrust Conplaint: Qu. 



HEARING 

BEFORE THE 

INFORMATION, JUSTICE, TRANSPORTATION, 
AND AGRICULTURE SUBCOMMITTEE 

OF THE 

COMMITTEE ON 

GOVERNMENT OPERATIONS 

HOUSE OP REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 
SECOND SESSION 



JUNE 30, 1994 



Printed for the use of the Committee on Governme&t««^^/|gfcT^|^ 





U.S. GOVERNMENT PRINTING OFFICE 
g^914 CC WASHINGTON : 1995 



For sale by the U.S. Government Printing Office 
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328 
ISBN 0-16-047228-8 



COMMITTEE ON GOVERNMENT OPERATIONS 



JOHN CONYERS, 
CARDISS COLLINS, Illinois 
HENRY A. WAXMAN, California 
MIKE SYNAR, Oklahoma 
STEPHEN L. NEAL, North Carolina 
TOM LANTOS, California 
MAJOR R OWENS, New York 
EDOLPHUS TOWNS, New York 
JOHN M. SPRATT. JR., South Carolina 
GARY A. CONDIT, California 
COLLIN C. PETERSON, Minnesota 
KAREN L. THURMAN, Florida 
BOBBY L. RUSH, Illinois 
CAROLYN B. MALONEY, New York 
THOMAS M. BARRETT, Wisconsin 
DONALD M. PAYNE, New Jersey 
FLOYD H. FLAKE, New York 
JAMES A. HAYES, Louisiana 
CRAIG A. WASHINGTON, Texas 
BARBARA-ROSE COLLINS, Michigan 
CORRINE BROWN, Florida 
MARJORIE MARGOLIES-MEZVINSKY, 

Pennsylvania 
LYNN C. WOOLSEY, California 
GENE GREEN, Texas 
BART STUPAK, Michigan 



Jr., Michigan, Chairman 

WILLIAM F. CLINGER, JR., Pennsylvania 

AL McCANDLESS, California 

J. DENNIS HASTERT, Illinois 

JON L. KYL, Arizona 

CHRISTOPHER SHAYS, Connecticut 

STEVEN SCHIFF, New Mexico 

CHRISTOPHER COX, California 

CRAIG THOMAS, Wyoming 

ILEANA ROS-LEHTINEN, Florida 

DICK ZIMMER, New Jersey 

WILLIAM H. ZELIFF, Jr., New Hampshire 

JOHN M. McHUGH, New York 

STEPHEN HORN, California 

DEBORAH PRYCE. Ohio 

JOHN L. MICA. Florida 

ROB PORTMAN, Ohio 

FRANK D. LUCAS. Oklahoma 



BERNARD SANDERS. Vermont 
(Independent) 



JUUAN ES'STEIN, Staff Director 
Matthew R. Fletcher. Minority Staff Director 



Information, Justice, Transpobtation, and Agriculture SuBCOMMirrEE 

GARY A. CONDIT, California, Chairman 

MAJOR R. OWENS, New York CRAIG THOMAS, Wyoming 

KAREN L. THURMAN, Florida ILEANA ROS-LEHTINEN, Florida 

LYNN C. WOOLSEY. California STEPHEN HORN. California 
BART STUPAK, Michigan 

Ex Officio 

JOHN CONYERS, Jr., Michigan WILLIAM F. CLINGER, Jr., Pennsylvania 

John Edgell, Professional Staff Member 

Aurora Ocg, Clerk 

Diane M. Major, Minority Professional Staff 



(II) 



CONTENTS 



Page 

Hearing held on June 30, 1994 1 

Statement of: 

Collins, Tim, manager, Aerosmith, Boston, MA 47 

Condit, Hon. Gary A., a Representative in Congress from the State of 

California, and chairman, Information, Justice, Transportation, and 

Agriculture Subcommittee: Opening statement 1 

Downs, Bertis, attorney, R.E.M., and adjunct professor. University of 

Georgia School of Law, Athens, GA 54 

Gossard, Stone, guitarist, Pearl Jam, Seattle, WA, accompanied by Jeff 

Ament, bassist; Kelly Curtis, manager; and Mike McGinley, business 

manager 6 

Marsh, Dave, rock and roll historian, New York, NY 66 

Morris, Chuck, manager. Nitty Gritty Dirt Band and others, Denver, 

CO 75 

Rascoff, Joe, managing director, RZO Inc 73 

Rosen, Fred, chief executive ofTicer, Ticketmaster 92 

Rothman, Claire L., general manager, Los Angeles Forum, Inglewood, 

CA 109 

Letters, statements, etc., submitted for the record by: 

Collins, Tim, manager, Aerosmith, Boston, MA: Prepared statement 50 

Corwers, Hon. John, Jr., a Representative in Congress from the State 

01 Michigan, and chairman, Committee on Government Operations: 

Prepared statement 4 

Downs, Bertis, attorney, R.E.M., and adjunct professor, University of 

Georgia School of Law, Athens, GA: Prepared statement 59 

Marsh, Dave, rock and roll historian. New York, NY: Prepared statement 69 
Owens, Hon. Major R., a Representative in Congress from the State 

of New York: Prepared statement 88 

Pearl Jam: Prepared statement 10 

Rosen, Fred, chief executive officer, Ticketmaster: 

Information concerning Ticketmaster Corp. and Subsidiaries 94 

Letter from Pam Lewis, Garth Brooks' manager 115 

Number of part-time employees employed at Ticketmaster 117 

Rothman, Claire L., general manager, Los Angeles Forum, Inglewood, 

CA: Prepared statement Ill 



(III) 



PEARL JAM'S ANTITRUST COMPLAINT: 
QUESTIONS ABOUT CONCERT, SPORTS, AND 
THEATER TICKET HANDLING CHARGES AND 
OTHER PRACTICES 



THURSDAY, JUNE 30, 1994 

House of Representatives, 
Information, Justice, Transportation, 

AND Agriculture Subcommittee 
OF THE Committee on GtOvernment Operations, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 9 a.m., in room 
2154, Rayburn House Office Building, Hon. Grary A. Condit (chair- 
man of the subcommittee) presiding. 

Present: Representatives Gary A, Condit, Major R. Owens, Karen 
L. Thurman, Lynn C. Woolsey, Bart Stupak, Craig Thomas, and 
Stephen Horn. 

^so present: Representative Colhn C. Peterson. 

Staff present: John Edgell, professional staff member; Aurora 
Ogg, clerk; and Diane M. Major, minority professional staff. Com- 
mittee on Government Operations. 

OPENING STATEMENT OF CHAIRMAN CONDIT 

Mr. Condit. The subcommittee will come to order. The House 
Government Operations Subcommittee on Information, Justice, 
Transportation, and Agriculture has investigative and oversight re- 
sponsibilities over certain Federal Grovernment agencies. 

Our hearing this morning, Pearl Jam's antitrust complaint, ques- 
tions about concert, sports, and theater ticket handling charges and 
other practices, falls within our jurisdiction over the Justice De- 
partment and oversight of antitrust matters. 

A 1991 decision by the Antitrust Division of the Justice Depart- 
ment allowed Ticketmaster to acquire its leading competitor, 
Ticketron. This calls into question the process for antitrust merg- 
ers. We will be asking the Justice Department to explain this proc- 
ess at a future date. 

We have formally requested documents relating to this merger in 
a letter to Attorney Greneral Reno and to the Assistant Attorney 
General, Mrs. Bingaman. The subcommittee intends to pursue this 
matter. 

Most Americans would not be expected to spend a great amount 
of time thinking about legal technicalities involving antitrust is- 
sues. But they do understand the harmful effects of monopolies in 
the marketplace. 

(1) 



The America free enterprise system thrives on a competitive 
marketplace. The consumer suffers when there is no competition. 
Monopolies fly in the face of what America is all about. That is the 
foundation of*^ effective antitrust policy. And almost every American 
consumer has something at stake. 

That is what this hearing is all about: Is there a monopoly in the 
ticket distribution industry? In short, who is there to protect con- 
sumers? 

Any consumer who has bought a ticket to a sports event, a con- 
cert, or a theater show and has had to pay $5 to $8 per ticket just 
for handling charges, I know a little bit about this myself Is the 
ticket distribution industry for the consumer's convenience or is it 
a cartel? We need to investigate the serious allegations made 
against Ticketmaster. And we intend to have a full and fair review 
of the charges. 

No one will dispute that Ticketmaster is good at what they do. 
They are. In fact, it is clear that Ticketmaster has been able to 
eliminate its competition because it is very, very good at what it 
does. No one disputes the convenience of Ticketmaster's services. 
Ticketmaster is a well-run, professional company that provides a 
needed service to consumers and performers. 

The key question is whether recent contractual agreements be- 
tween Ticketmaster and most major stadiums and concert promot- 
ers have violated Federal antitrust law. This hearing follows a 
legal brief filed by Pearl Jam — a Seattle, WA-based alternative 
rock band — with the Justice Department to investigate alleged 
antitrust violations of Ticketmaster, a national ticket distribution 
company. 

The Justice Department has announced a formal investigation of 
Ticketmaster and the ticket distribution industry. This subcommit- 
tee has a responsibility to pursue an issue that touches the ordi- 
nary daily lives of millions of consumers. The subcommittee in- 
tends to offer an opportunity for all sides to air their views. 

We are honored to have representatives of both Pearl Jam and 
Ticketmaster, together with other respected members of the music 
industry here with us today. 

Since the Justice Department is at an early stage in its inves- 
tigation, they will not appear today. The subcommittee expects to 
hear from the Justice Department at a later date. 

We are honored to have a number of witnesses willing to tell it 
like it is from their perspective. Some of them may have put their 
careers at some level of risk by testifying today. We are grateful 
for their cooperation. 

Having said all this, we will get to those witnesses as quick as 
we can, but I must first allow the subcommittee members to make 
any opening statements that they may want to make. We are hon- 
ored today to have the distinguished chairman of the full commit- 
tee here with us today, Mr. John Conyers. 

Mr. Chairman, do you have any statement you would like to 
make for the record? 

Mr. Conyers. Thank you very much. Chairman Condit. I wish 
to congratulate you and these artists who have dared to come for- 
ward. As a strong advocate of performing arts and with many close 
friends in the industry, this is an issue of extreme importance to 



me, and we can see from the enthusiastic response to this hearing 
that this is an issue that is of great interest to the American people 
as well. 

Question: Why is it when you personally go to the box office to 
buy sports or performing arts tickets, when you are right at the 
stadium or a concert hall, you have to pay a service charge to 
Ticketmaster for the honor of purchasing from them? What service 
do they provide that they can rationalize charging so much money 
for so little effort? My staff contacted the management of the 
Chene Park Amphitheater in Detroit, and they said that they rou- 
tinely receive calls complaining about high handling charges and 
lack of other ways to buy tickets in most cases, and so I am de- 
lighted to join vou here today. 

Let me just leave with you this observation. When art is success- 
ful, it unavoidably becomes a business. The question, then, is 
whether artists have an inherent right to control the limits of their 
business and how it relates to the growth of their art. The answer, 
I am convinced, is that artists do have a right to that control. 
Thank you very much. Chairman Condit. 

[The prepared statement of Mr. Conyers follows:! 



STATEMENT OF JOHN CQMYEKS, JK., CHAIRMAN OF THE CCMMZTTEE ON 

GOVERNMENT OPERATIONS 

BEFORE TEE 

INFORMATION, JTTSTICE, TRANSPORTATION AND AGRICOLTURE 

SUBCOMMITTEE, COMMITTEE ON GOVERNMENT OPERATIONS 

HEARING ON PRACTICES WITHIN TEE TICKET DISTRIBUTION INDUSTRY 

JUNE 30, 1994 

As a strong advocate of the performing arts, and with many 
close friends in the music industry, this issue is of extreme 
iiq>ortance to me. And we can see from the enthusiastic response 
to this hearing that this is an issue that is of great interest 
to the American people. It is important to the minority 
communities as well, including African Americans, who have 
produced some of the world' s best artists like Thelonious Monk, 
Aretha Franklin, Miles Davis, Janet Jackson and Wynton Marsalis. 
Yet many members of the minority community are excluded from the 
possibility of seeing high-quality artists because of outrageous 
ticket prices. It is important for young people also, most of 
whom are hot rich, because they want to have access to these 
artists. A monopoly by middlemen must not stop the availability 
of culture to anyone outside the wealthiest in our society. 

Why is it that even when you personally go out to the box 
office to buy sports or performing arts tickets, when you're 
right at a stadium or concert hall, you have to pay a service 
charge to Ticketmaster for the honor of purchasing from them? 
What service do they provide that they can rationalize charging 
so much money for so little effort? 

My staff contacted the management at the Chene Park 
Aiq>hitheater in Detroit, in my congressional district, and the 
Assistant General Manager said that he routinely handles ten 
calls a day complaining about high handling charges and the lack 
of other ways to buy tickets in most cases. 

The American people see what is happening and they don' t 
like itt Ticketmaster appears to be exploiting its exclusive 
contracts with major entertainment outlets, and the average 
consumer is being gouged with outrageous service fees. Consumers 
are demanding that we investigate these practices, and I'm glad 
the Justice Department is doing so. I look forward to hearing 
Pearl Jam and others as we get to the heart of this issue today. 

Congratulations and thanks to Congressman Condlt for 
organizing today's important hearing. 



Mr. CONDIT. Thank you, Mr. Chairman, We have the ranking 
member on the Republican side, Mr. Thomas. Mr. Thomas, do you 
have a statement that you would like to make? 

Mr. Thomas. Yes, thank you, Mr. Chairman. I will be brief so we 
can get on with it. Before we begin today's hearing, let me just 
state at the outset that I believe as a general proposition that the 
market is an effective regulator from determining prices to selling 
one's product efficiently. 

Clearly, there are instances, however, where a minimal competi- 
tion exists and we should take a closer look at how to foster it, not 
just in the music industry but in other areas as well. Certainly, 
this is a more well-attended hearing than we usually have on this 
matter, so I am delighted for that. Unfortunately, the Clinton ad- 
ministration's Justice Department has chosen not to participate, 
and without the presence of the Justice Department it will be dif- 
ficult to accomplish this task. 

The subcommittee has oversight responsibility of the Depart- 
ment. We should evaluate the Antitrust Division and the guidelines 
the Division has used to review competitive effects of mergers and 
acquisitions. 

As you are aware, two of the witnesses are presently involved in 
legal disputes. This matter should be left to the review of the Jus- 
tice Department where it has been appropriately filed. Today's tes- 
timony and questions should instead focus on how the Department 
interprets current antitrust laws and applies them. This is where 
the subcommittee's iurisdiction falls. This is the area that we 
should evaluate, and if we need to make improvements, so Mr, 
Chairman, thank you. I look forward to the testimony. 

Mr. CONDIT. Thank you, Mr. Thomas. I will turn to my left to 
the subcommittee's musician, Mr. Peterson, 

Mr, Peterson. Thank you, Mr. Chairman. I have to admit that 
I, after some requests, tried to learn some Pearl Jam songs, but I 
think it is a little beyond me. They have great music, but I iust 
couldn't work it into my repertoire. But I do appreciate your calling 
the hearing and allowing me to be with you today, and I commend 
these young folks for coming forward. 

I am probably the only card-carrying member of the Federation 
of Musicians up at the table here today. I have never had the kind 
of problem they had. There weren't that many people clamoring to 
get in to see my performances, but anyway, I also found out that 
Mr. Ament's father is from Blufflon, just south of Blufiflon in mv 
district, about 30 miles from where I live, so it is a small world. 
Welcome to the committee. We appreciate your coming forward. 
Thank you, Mr, Chairman. 

Mr. UONDIT. Thank you, Mr. Peterson. 

Mrs. Thurman. 

Mrs. Thurman, I just wanted to welcome you all and look for- 
ward to your testimony and let you know that you have really put 
quite a stir on Capitol Hill today. 

Mr. CONDIT. Mr. Stupak. 

Mr. Stupak. No statement. 

Mr. CoNDiT. Thank you very much. We have a practice of swear- 
ing all witnesses in. Would you gentlemen rise and raise your right 
hand. 



[Witnesses sworn.] 

Mr. CoNDiT. OK, we got off to a great start, they said I do. Be- 
fore we start, no bottles, no cans, no frisbees or beach balls are al- 
lowed at this hearing. Lighters are OK though. We are delighted 
to have both of you here. You have been very courageous in bring- 
ing your complaints forward and dealing with an issue that is im- 
portant to the American people. I don't know the full extent you 
may have put your own careers at risk, and I think that is a very 
courageous thing for you to do. Hopefully, this will help consumers 
across this country. 

We have Mr. Stone Grossard, are you the drummer? 

Mr. GossARD. I play guitar. 

Mr. CONDIT. Jeff. 

Mr. GossARD. Plays bass. 

Mr. CoNDlT. OK We appreciate you being here. Who would like 
to go first? Stone. 

STATEMENT OF STONE GOSSARD, GUITARIST, PEARL JAM, SE- 
ATTLE, WA, ACCOMPANIED BY JEFF AMENT, BASSIST; KELLY 
CURTIS, MANAGER; AND MIKE McGINLEY, BUSINESS MAN- 
ACER 

Mr. GossARD. Yes, I would like to go first. I am not used to doing 
this sort of thing, so bear with me if it is a little rough. 

Mr. Chairman and members of the subcommittee, my name is 
Stone Gossard. With me is JefF Ament. I play guitar and Jeff plays 
bass, as you know. I would first like to thank you, Chairman 
Condit, for holding this hearing today. We, and I am sure many 
other Americans, feel very strongly about the subject of this hear- 
ing, and we appreciate your efforts to shed light on this matter. 

All the members of rearl Jam remember what it was like to be 
young and not to have a lot of money. Many Pearl Jam fans are 
teenagers who do not have the money to pay $30 or more that is 
often charged for tickets today. Although given our popularity, we 
could undoubtedly continue to sell out our concerts with ticket 
prices at a premium level, we have made a conscious decision that 
we do not want to put the price of our concerts out of the reach 
of our fans. 

For these reasons we have attempted to keep the ticket price to 
our concerts to a maximum of $18. In addition, we have also tried 
to limit any service charges that may be imposed on the sale of 
those tickets to a reasonable percentage of the actual ticket price. 
We have also tried to ensure that any service charge will be sepa- 
rately identified from the price of the ticket itself so that fans know 
how much is being charged for the ticket and how much is being 
added on by the companv selling the ticket. 

Our efforts to try to keep our ticket prices at this level and to 
limit excessive service charges have put us at odds with 
Ticketmaster. Ticketmaster is a nationwide computerized ticket 
distribution service that has a virtual monopoly on the distribution 
of tickets to concerts in this country. It is today almost impossible 
for a band to do a tour of large arenas in major cities and not deal 
with Ticketmaster. 

The reason that bands like Pearl Jam have to deal with 
Ticketmaster is because Ticketmaster has exclusive contracts with 



most major venues, and almost all significant concert promoters in 
the United States. In essence, if you play at any of these venues 
or if you deal with any of these promoters, Ticketmaster will claim 
that its contracts give it the exclusive right to distribute tickets for 
your concert. 

Ticketmaster's exclusive agreements with most of the suitable 
venues and promoters has left most bands without any meaningful 
alternative for distributing tickets. This absence of any alternative, 
in turn, gives Ticketmaster the power to exercise excessive control. 
The result for our fans has been higher service charges, meaning 
effectively that they pay higher prices for their tickets. 

To imderstand how Ticketmaster found itself in this position of 
power requires a brief description of the structure of our business. 
When Pearl Jam makes arrangements to go on tour, we act 
through an agent. Our agent will then enter into an agreement 
with a promoter for a particular show or shows. The promoter in 
turn will enter into an agreement with a venue. Typically, the 
venue, the promoter or both will have exclusive agreements with 
Ticketmaster. 

It is well known in our industry that some portion of the service 
charges Ticketmaster collects on its sale of tickets is distributed 
back to the promoters and the venues. It is this incestuous rela- 
tionship>— and the lack of any national competition for 
Ticketmaster — that has created the situation we are dealing with 
today. The service fee, which in concept should be nothing more 
than a handling charge for purchasing tickets, has thus become a 
source of additional revenue, not only for Ticketmaster, but for the 
promoters and the venues. 

In at least one instance, Ticketmaster's service fee has reportedly 
gone as high as $15 a ticket. Bands like Pearl Jam by contrast re- 
ceive no part of the service charges collected by Ticketmaster, and 
let me make it quite clear that Pearl Jam seeks no portion of those 
service charges. 

As a result, our band, which is concerned about keeping the price 
of its tickets low, will almost always be in conflict with 
Ticketmaster which has every incentive to try to find ways to in- 
crease the price of the ticket itself. 

The written statement we have submitted to you today contains 
many examples of how Ticketmaster has used its power to interfere 
with or to stop our efforts to keep the price of our tickets low. I 
refer you to that statement for details. 

Since we brought Ticketmaster's conduct to the attention of the 
Justice Department almost 2 months ago, public support for us and 
more generally for our efforts to reduce ticket prices has been over- 
whelming. Although our success as a band gives us a degree of 
power to stand up to Ticketmaster, we are not simply crusading for 
some abstract cause at the spur of the moment. This is business 
as usual for this band. 

For over 10 years Jeff and I always made it a point to try to en- 
sure low prices for our tickets, the T-shirts and everything else as- 
sociated with the various bands we played in. We, in fact, recently 
did a show in Atlanta that any radio station who wanted to could 
broadcast for free. Jeff, in particular, has always been an advocate 



8 

of keeping things affordable and making sure our audience has ac- 
cess to our music. 

Jeff grew up in Big Sandy, MT, and survived on a very hmited 
music budget. We have had many conversations regarding the im- 
portance of music to his spiritual development and survival. There 
is too much great music out there to be limited to just a few be- 
cause of a ridiculously high ticket price. Anyone who has worked 
with us knows that this has always been an important concern of 
ours. 

Our interest is really quite narrow. We simply have a different 
philosophy than Ticketmaster about how and at what prices tickets 
to our concerts should be sold. We can't insist that Ticketmaster do 
business on our terms, but we do believe we should have the free- 
dom to go elsewhere if Ticketmaster is not prepared to negotiate 
terms that are acceptable to us. 

As we learned in attempting to go on tour this summer, because 
of Ticketmaster's dominance of the industry, our only other option 
was to play nontraditional venues and use nonestablished promot- 
ers or promote our own shows. Using nontraditional venues and 
promoters would create a tremendous security risk for our fans if 
we are forced outside the network of established venues and pro- 
moters currently working major cities. We would have to seriously 
question whether we could consistently provide safe and secure 
concerts for our fans. 

Ticketmaster's monopoly ensures that our only alternatives are 
unsafe, risky, and financially more complex, Mr. Chairman, this is 
really about choices. Fans can go from one music store to another 
to find the best deal on a CD, but they can't go anywhere but 
Ticketmaster for concert tickets. We are able to choose marketing 
strategies and how we work with Sony, our record label, as well as 
others in the business, but when it comes to tickets, we feel we 
have no fair choices. 

The lack of competition is not conducive to free enterprise. Where 
is the incentive to give the consumer a quality product for a rea- 
sonable cost when you don't have to? Why does Ticketmaster 
charge a high service fee? Because they can. Something is vastly 
wrong with a system under which a ticket distribution company 
can dictate the markup on a price of a concert ticket, can prevent 
a band from using another less expensive approach to distributing 
tickets, and even effectively preclude a band from performing at a 
particular arena if it does not want to use Ticketmaster. This is 
also about knowing what you are paying for. 

Service charges range from $1 to $15. That is not based on the 
value of the service the company performs, it is based on how much 
money they can get. None of the other companies once accused of 
being monopolies — phone companies, buses, whatever — are able to 
charge the public such ridiculous and random amounts. 

In bringing Ticketmaster's conduct to the attention of the De- 
partment of Justice, Pearl Jam hoped that the government would 
agree with our view that Ticketmaster's anticompetitive business 
practices are illegal and would take steps to stop those practices 
from continuing. We believe that the Department of Justice is par- 
ticularly well suited to deal with this matter because the problem 



is national in scope and has broader ramifications than simply the 
price of tickets to a Pearl Jam concert. 

We are encouraged by the Antitrust Division's investigation into 
those practices and we look forward to the outcome of that inves- 
tigation and any enforcement action that may result. Congressional 
attention and support for this matter will, we hope, reinforce the 
Antitrust Division's efforts. 

We feel Ticketmaster has in essence dug its own grave on this 
issue. It is unwilling to be in step with the times and to cooperate 
with a band whose business ideals are commendable, given the 
state of the world today. Just look at the tours planned for this 
summer. There are plenty of bands charging a lot for their tickets 
who seem to have no conflict with Ticketmaster's practices. In the 
scheme of things, Pearl Jam is a minute percentage of the overall 
concert revenues. 

In closing, I would like to thank you for requesting that we bring 
these matters to the attention of the subcommittee. Jeff and I 
would now be pleased to respond to any questions you have. We 
would also like to thank all of our friends and fans and R.E.M., 
Aerosmith, and the Grateful Dead for showing support for us also. 

[The prepared statement of Pearl Jam follows:] 



10 



STATEMENT OF PEARL JAM 

TO THE INFORMATION, JUSTICE, 

TRANSPORTATION AND AGRICULTURE SUBCOMMITTEE 

OF THE HOUSE COMMITTEE ON GOVERNMENT OPERATIONS 

Pearl Jam submits this statement In connection 
with the oral testimony before the sub-committee of Stone 
Gossard and Jeff Ament, two members of the band, on June 30, 
1994. 

As most or all of you are aware, in early May of 
this year, our attorneys at Sullivan & Cromwell filed a 
memorandum with the Antitrust Division of the Department of 
Justice in which we brought to the Government's attention 
certain conduct by Tlcketmaster that we believe is 
unlawfully interfering with our freedom to detennine the 
price and other terms on which tickets to our concerts will 
be sold. The high price of concert tickets — especially 
the imposition of excessive service charges — is a 
significant issue to us and we believe to the public 
generally. In this statement we will discuss the reasons 
why Pearl Jam is especially sensitive to the price of 
tickets to our concerts; describe some of the incidents that 
led us to bring Tlcketmaster 's conduct to the attention of 
the Justice Department; address the reasons why we believe 
Tlcketmaster 's business practices violate the antitrust laws 
and the consequences those business practices have on us, on 
our fans, and on others who purchase tickets to concerts; 
and finally, discuss the- type of change we hope will occur 



11 



in this industry and how Government action might help bring 
that about. 

Many of Pearl Jam's most loyal fans are teenagers 
who do not have the money to pay the $50 or more that is 
often charged today for tickets to a popular concert. 
Although, given our popularity, we could undoubtedly 
continue to sell-out our concerts with ticket prices at that 
premium level, we have made a conscious decision that we do 
not want to put the price of our concerts out of the reach 
of many of our fans. Moreover, we do not want to be 
responsible for teenagers, who may be influenced by peer 
pressure to feel that they must see Pearl Jam perform, 
spending more money for that concert ticket than they can 
really afford. All of the members of Pearl Jam remember 
what it is like to not to have alot of money, and we 
recognize that a teenager's perceived need to see his or her 
favorite band in concert can often be overwhelming. 

For these reasons, we have attempted to keep the 
ticket prices to our concerts to a maximum of $18. We have 
also tried to limit any service charges that may be imposed 
on the sale of those tickets to 10 percent of the ticket 
price, and to ensure that any service charge will be 
separately identified from the price of the ticket itself so 
that fans know how much is being charged for the ticket and 
how much is being added on by the company selling the 
ticket. As a result, even where a service charge is 

-2- 



12 



imposed, our goal is to make it so that no one will pay more 
than $20 to see a Pearl Jeun concert. 

Our efforts to try to try to keep prices for 
tickets to our concerts to this low level and to limit the 
possibility of excessive service charge mark-ups have put us 
at odds with Ticketmaster. Ticketmaster is a nationwide 
computerized ticket distribution service that has a virtual 
monopoly on the distribution of tickets to concerts in this 
country. It has been no secret that since Ticketmaster 
acquired Ticketron, the only other nationwide computer 
ticket service, service charges have been on the rise. It 
is today virtually impossible for a band to do a tour of 
large arenas or other significant venues in major cities and 
not deal with Ticketmaster. 

The reason that a band like Pearl Jam has been 
required to deal with Ticketmaster is because Ticketmaster 
has exclusive contracts with most major venues for concerts 
and with almost all significant promoters of concerts in the 
United States. In essence, if you play any of these venues 
or if you deal with these promoters, Ticketmaster will claim 
that its contracts give it the exclusive right to distribute 
tickets for your concert. This affords Ticketmaster 
tremendous power in this business. 

By locking up all of the suitable venues and 
promoters with arrangements of this type, Ticketmaster has 
effectively thwarted competition and left most bands without 

-3- 



13 



any meaningful alternative for distributing tickets. This 
absence of any alternative, in turn, gives Ticketmaster the 
power to exercise virtual control — to the exclusion of the 
views of the band — over the level of service charge 
imposed on tickets for that band's concert that are sold 
anywhere but at the box office. The result, for our fans, 
has been higher service charges, meaning effectively that 
they pay higher prices for their tickets. Often those 
service charges are buried in the overall price charged by 
Ticketmaster, so that the fan may not even know that a 
substantial portion of what he or she is paying is a 
Ticketmaster- imposed surcharge. 

Now, some of you might wonder how Ticketmaster, 
seemingly a service organization performing the routine 
function of distributing tickets, managed to put itself in a 
position where it can exercise such a high degree of control 
over the pricing and distribution of concert tickets. To 
understand this requires a brief description of the 
structure of our business. 

When Pearl Jam makes arrangements to go on tour, 
we act through an agent. Our agent will then enter into an 
agreement with a promoter for a particular show or shows. 
The promoter, in turn, will enter into an agreement with the 
venue. And as indicated above, typically the venue, the 
promoter or both will have exclusive contracts with 



-4- 



14 



Ticketmaster for the distribution of tickets for events in 
which they are involved. 

It is well known in our industry that some portion 
of the service charges Ticketmaster collects on its sale of 
tickets is kicked back to the promoters and the venues. 
Thus, Ticketmaster 's service charges are a source of 
additional revenue for venues and promoters. It is in their 
interest, as well as in Ticketmaster 's interest, to impose 
high service fees. The "service fee" — which in concept 
should be nothing more than a handling charge for the 
convenience and cost associated with purchasing a ticket 
over the phone or at a remote location — has thus become a 
source of additional revenue not only for Ticketmaster but 
for the promoters and venues. 

As anyone who has read the papers this summer is 
undoubtedly aware, the Ticketmaster service charge has in at 
least one case been reported to have gone as high as $15 per 
ticket. An informal survey of the service charges being 
imposed by Ticketmaster on the events currently being 
advertised in the Los Angeles area shows that they range 
from a low of $3.50 for a ticket to an ice skating show at 
the Forum to $6.25 for a ticket to see either ZZ Top or Phil 
Collins at the Forum or Janet Jackson at Irvine Meadows, to 
a high of $7.25 for a ticket to see the Eagles at the Rose 
Bowl. On top of that, Ticketmaster imposes an additional 
charge of $2.00 or more per order if the tickets are ordered 

-5- 



15 



by phone.* By contrast, the service charge imposed on a 
ticket to the musical Sunset Boulevard purchased over the 
phone — from a non-Ticketmaster service — is only $3.00, 
less than the lowest charge being imposed by Ticketmaster 
and less than half of the surcharge Ticketmaster imposes for 
a ticket to a ZZ Top, Janet Jackson or Phil Collins concert. 
There can be little question that if competition existed, 
service fees would be lower.** 

Bands like Pearl Jam receive no part of the 
service charges collected by Ticketmaster. And let us make 
it quite clear that Pearl Jam seeks no portion of those 
service charges. As a result, a band like Pearl Jam, which 
is concerned about keeping the price of its tickets low, 
almost by necessity finds itself on the opposite side of 
Ticketmaster, which has every economic incentive to raise 
the price of the tickets it sells. 

During its brief existence. Pearl Jam has had 
several confrontational encounters with Ticketmaster. The 
first occurred in 1992, in connection with the "Drop in the 
Park Show", a free concert Pearl Jam arranged in Seattle. 
Pearl Jam paid for the costs of staging the free concert — 



* Attachment A summarizes the fees currently being 
charged by Ticketmaster for various events in the Los 
Angeles area. 

** As another example. Smith Tix, in the State of Utah, 
where there is no other competing ticket service, imposes 
services charges ranging from $1 to a maximum of $2.65. 



-6- 



16 



an amount in excess of $125,000 — but was required for 
security reasons to limit attendance to 30,000 fans and as a 
result had to distribute tickets. Ticketmaster refused to 
distribute tickets for this free concert for less than a 
$1.50 per ticket service charge (a total of $45,000), 
requiring us to make other arrangements with the City of 
Seattle to distribute tickets. 

A series of run-ins with Ticketmaster during our 
last tour illustrates quite clearly the power that 
Ticketmaster wields and the risk that any band undertakes in 
attempting to utilize an alternative to Ticketmaster 's 
distribution system. Last December, we had made 
arrangements with a local promoter in Seattle to perform at 
the Seattle Center Arena. A portion of the proceeds from 
this concert were to go to charity. We originally had an 
agreement with Ticketmaster under which they would 
distribute tickets for the concert and impose a service 
charge of $3.25, of which $1 would be donated by them to the 
charity, plus they would make an additional contribution 
from their revenues so that their total contribution would 
be $20,000 if the concert sold out. Pearl Jam also agreed 
to contribute $20,000 to the charity. At the last minute, 
just as tickets were about to go on sale, Ticketmaster 
reneged, and threatened not to sell tickets if it could not 
raise the service charge by $1 per ticket to cover the 
amount of their contribution. After a tense impasse, 

-7- 



17 



Ticketmaster finally relented and agreed to charge only 
$3.25, but it limited its contribution to the $1 per ticket 
portion of its undertaking and did not make the full 
contribution it had originally agreed to make. 

After this, our run-ins with Ticketmaster became 
increasingly threatening. In Chicago last March, 
Ticketmaster insisted on imposing a $3.75 service charge on 
top of the $18 price of a ticket to our concerts. We 
negotiated with Ticketmaster 's general manager in Chicago 
and obtained an agreement to identify that service charge 
separately from the actual price of the ticket. Then, just 
as tickets were to go on sale, Ticketmaster again reneged. 
It was necessary for us to threaten to perform at another 
venue before Ticketmaster backed down and agreed to sell 
tickets that separately disclosed its service charge. Even 
then, Ticketmaster told us that its concession only extended 
to our Chicago shows and we should not expect them to be 
willing to do it elsewhere. 

Chicago was followed soon after by Detroit. In 
Detroit, we decided to try to bypass Ticketmaster by 
distributing tickets through our fan club and by a lottery 
system. We were informed that Ticketmaster threatened the 
promoter of this concert with a lawsuit for violating its 
exclusive Ticketmaster agreement by allowing this method of 
distribution to occur, and also temporarily disenabled the 



-8- 



18 



promotor's ticket machine so that it could not print tickets 
for the concert for that time. 

In New York, where we played a show at the 
Paramount Theatre in April of this year, we tried to 
distribute some tickets over the radio. Using a city-wide 
promotion, tickets were sold through the Paramount Box 
office. Here again, we were informed that Ticketmaster 
threatened the Paramount 's management with legal action for 
supposedly allowing us to evade Ticketmaster 's exclusive 
rights. 

While we were experimenting with these alternative 
distribution arrangements, Ticketmaster attempted to 
threaten and intimidate us. For example, at one point the 
person in charge of handling concert arrangements for us was 
told by Ticketmaster in essence that he had better watch 
himself and that if we didn't back off he would be run out 
of the business. 

After the conclusion of our winter tour, we began 
to plan for a tour this summer. In attempting to arrange 
that tour, we made it clear that we would only perform if 
the service charge imposed on our tickets was limited to 10 
percent and was separately disclosed. Ticketmaster 
responded by spreading the word to promoters that it viewed 
our efforts as a threat to its business and urged promoters 
to refuse to deal with Pearl Jam. For example, as we 
disclosed to the Justice Department, in March of this year, 

-9- 



19 



Ben Liss of the North American Concert Promoters Association 

— a group of all major promoters In North America — sent a 
memorandum to the Association's members in which he referred 
to them as "brother racoons" and warned that: 

"Ticketmaster has indicated to me that they will 
aggressively enforce their contracts with promoters and 
facilities. Ticketmaster 's stance is that they have 
been loyal to their partners in this business and they 
hope & expect their partners will reciprocate." 
A day later Mr. Liss sent the Association's 
members an "update" on the matter, in which he conveyed that 
"Fred" — referring to Fred Rosen, the CEO of Ticketmaster - 

- "intends to take a very strong stand on the issue" and 
that Ticketmaster "will use all available remedies" to 
protect itself. He added that "[Ticketmaster] views the 
Pearl Jam issue as an all or nothing proposition, meaning 
that they will not agree to handle half of the available 
inventory on a show in any situation where a contract 
exists."* 

Now what is wrong with Ticketmaster 's business 
practices? On a purely practical level, its practices are a 
problem because they preclude bands like Pearl Jam from 
having access to any alternative method of distributing 
tickets with the consequence that our fans are forced to pay 



* Copies of the memos are annexed as Exhibits B and C to 
this statement. 



-10- 



20 



higher ticket prices. In our memorandum to the Justice 
Department, Sullivan & Cromwell explained why those 
practices should also be considered to be illegal. 

As our memorandum to the Justice Department 
explains, Ticketmaster's exclusive arrangements with 
promoters and venues are unreasonable restraints of trade, 
and its use of those arrangements to prevent promoters and 
venues from dealing with Pearl Jam amounts to a group 
boycott, in violation of Section 1 of the Sherman Act. 
Ticketmaster is also a monopolist, having acquired and 
perpetuated that position through its acquisition of 
Ticketron and various other regional ticket services and the 
use of long term exclusive contracts. In acting to preclude 
Pearl Jam and other bands from distributing tickets to their 
own concerts other than through Ticketmaster, Ticketmaster 
is unlawfully exercising that monopoly power in violation of 
Section 2 of the Sherman Act. 

Since we brought Ticketmaster's conduct to the 
attention of the Department of Justice almost two months 
ago, public support for us and more generally for efforts to 
reduce ticket prices has been overwhelming. Although our 
success as a band gives us a degree of power to try to stand 
up to Ticketmaster that newer and less established bands do 
not have, we do not consider ourselves to be crusaders. And 
while we recognize that the issues we have raised have 
implications that go beyond Pearl Jam, our interest is 

-11- 



21 



really quite narrow. We simply have a different philosophy 
than Ticketmaster does about how and at what price tickets 
to our concerts should be sold. We do not want to force 
Ticketmaster to do business on our terms, but we believe we 
should have the freedom to go elsewhere if Ticketmaster is 
not prepared to negotiate terms that are acceptable to us. 
That is the essence of competition. As we learned in 
attempting to arrange a tour this summer, given the current 
state of Ticketmaster' s dominance of the industry, that may 
well mean that we must play non-traditional venues and use 
non-established promoters or promote our own shows. 

The level of the service charge is not the only 
problem that Pearl Jam faces in connection with the sale of 
tickets to its concerts. Beyond the excessive service 
charges there are the problems of ticket scalping, 
counterfeiting, and commercial advertising on tickets. For 
example, at some of our recent concerts, an informal poll of 
fans in the audience revealed that more than 40 percent of 
them bought their tickets from ticket brokers. At many of 
our concerts, we are experiencing a counterfeit ticket rate 
of about 2-1/2 - 3%. And at one recent concert in Boston, 
we learned that some of these counterfeit tickets had been 
sold to fans for $250. 

The problems of ticket scalping and counterfeiting 
are not new or unique to Pearl Jam concerts. There are, 
however, steps that can be taken to address those problems. 

-12- 



22 



These include specific monitoring to ensure that when 
tickets to a concert go on sale to the public, none are held 
back for the benefit of ticket brokers. With respect to 
counterfeiting, it is possible to use ticket stock that is 
more difficult to copy. Ticketmaster, unfortunately, has 
been unwilling to address these concerns. 

Pearl Jam believes that if Ticketmaster is unable 
or unwilling to provide the level of service that Pearl Jam 
believes is appropriate for the distribution of tickets to 
Pearl Jam concerts, then we should have the option to make 
arrangements to distribute tickets to our concerts through 
other means. That freedom of choice — a basic principle of 
competition in this country — does not effectively exist in 
the music industry today. Something is vastly wrong with a 
structure under which a ticket distribution service can 
dictate the mark-up on the price of a concert ticket, can 
prevent a band from using other, less expensive, methods of 
tickets, and can effectively preclude a band from performing 
at a particular arena if it does not accede to using 
Ticketmaster. The effect of this situation on ticket prices 
has not been subtle: prices paid by consumers — the 
ordinary concert fans — for tickets to see Pearl Jam or any 
other band in concert are higher than they would otherwise 
be if competition existed. 

In bringing Ticketmaster 's conduct to the 
attention to the Department of Justice, Pearl Jam hoped that 

-13- 



the Government would agree with our view that Ticketmaster's 
anticompetitive business practices are illegal and would 
take steps to stop those practices from continuing. We 
believe that the Department of Justice is particularly well 
suited to deal with this matter because the problem is 
national in scope and has broader ramifications than simply 
the price of tickets to a Pearl Jam concert. He are 
encouraged by the Antitrust Division's public confirmation 
that it is conducting an investigation into those practices 
and we look forward to the outcome of that investigation and 
hopefully to enforcement action that will serve to prevent 
these practices from continuing. Congressional attention 
and support for this matter will, we hope, reinforce the 
Antitrust Division's activities. 



-14- 



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25 



EXHIBIT B 

NpR^lJ^KEJy£^iLCO^LClRT PROJ^IOTERS JS^ 

March 14. 199* 

TO /U I WArPA M EMBERS 

Dear (■'nends: 

ObviiHuly. spring traininfi has te£un and h's ^uu'S to be a long teason. 

I.alertMl you last week about tbc concenw of your hmiher raocuuu> oo Mcailoafs national 
ad campaign. This wcvk'i topic k PEARJ ■ JAM. 

PEARL JAM K putdns oin reclen oooc aiain (o require pnnnnters to bypaw TickciMasier 
on their dates later iliis sumincr- TM htw iadicaied tn me tDey will aggreuivcty enforce 
Itifffr cODtnM.is with promoten and facilities TtcketMaswr's suntx u that they have been 
luyal to their partnen in this business and ilicy hope & expect their pannen: will 
reciprocate. I do not nAcd to remiDd yuu tliat loyalty in oor induniy is a valuable auet auJ 
that long-rerm relailopships depend upon it 

f b»w you are very bu«y and i nnceiely hope you are making great deals thai will see you 
through your mo«t stirceuAil season ever. 



He«t regaitlS' 



-^"^y^ 



PS: Nick Gokl (212/840-7800) is waiting to bear from you. Maiec your NasbvOle Hotel 
reservarimw ASAP. 



1622 NarA41jt Strut MeUtti. Vs-flaM 23iO/4M7 T€l:l70J)3U-4«44 FaL:(703}S3*^a7 



26 



EXHIBIT C 



INUKid AMlLKlLAiN tUi^itiLKi rRUiviuicno noouv.i/\i luii 



March 25. 1994 



PEARL JAM TICKETING 



This U an update on the Pearl Jam/Tickeimasier controversy. 

Fred has indicated that he intendi; tn talce a Tcry strong stand on this issue to protect 
Tickeunascer's existing contracts with promoters and facilities and. further, TM will use all 
available remedies to protect itself from outside third panics that ancmpt to interfere with 
those existing contracts. TM views the Pearl iam issue as an all or nothing proposition, 
meaning they will not agree to handle half of the available inventory on a show in any 
situation where a contract txisK. 

If asked, you may wish to consider and cite this fact: you and/or your venue have an 
existing contract with TM which precludes you from contracting with others to distribute 
tickets. 1 urge you to be very careful about entcrine into a conflicting agreemeo: which 
could expose you to a law.<:ui(. 

I know all of you hope this maner is resolved amicably to everyone's satisfaction. In the 
interim, you may want tn review your situation in preparation for an important decision that 
you may be asked to make next week. 




tx^-y V....L ^ f .. Ca..... i#*r •*. r/.*...-.;* ^^lAr ai^T ^*i, nnv* t7j *ojji c*«. 'init c».« 4^-11 



27 

Mr. CONDIT. Thank you, Mr. Gossard. Mr. Ament, do you have 
any comment you would Hke to make? 

Mr. Ament. No, I will just answer questions. 

Mr. CONDIT. You will just answer questions, OK We have heard, 
and this is for both of you if you want to respond, we have heard 
that Ticketmaster considers itself the victim in this matter. What 
do you think about that? 

Mr, Gossard. Say that again, I am sorry. 

Mr. CoNDiT. Ticketmaster, we have heard, feels they are the vic- 
tim in this matter. Do you have any response to that? 

Mr. Ament. Well, I think, I mean the victim from where we are 
coming from, is being a fan and being a person that doesn't have 
a lot of money to spend on tickets, and I think that is where the 
victim lies. I don't think we consider ourselves necessarily being a 
victim, either. I definitely don't think Ticketmaster is a victim. 

Mr. CoNDiT. I read in the L.A. Times last night that in an effort 
to keep the ticket prices down that the band forfeited $2 million 
in fees. Is this true? 

Mr. Ament. I am not really sure how much money we forfeited. 
In a lot of cases the money at this point really isn't that important 
to us. We are trying to do things in a new and different way and 
a new approach to things. Just from a different perspective because 
that has never been our major goal. Our major goal has been to 
make great music together and a lot of levels we have come to that 
point. 

Mr. Gossard. If the question is could we make more money 
going on tour, yes, we could. We could make a lot more money than 
we are making right now by going on tour. 

Mr, CONDIT. I am not real familiar with the music industry. Our 
industry up here, we chat with each other from time to time and 
share horror stories. Have you heard from other performers on this 
issue? Are there other bands who are concerned about this? If so, 
are they individual performers? Could you share that with us? 

Mr. Ament. I think mainly Kelly Curtis, our manager, has been 
talking to a lot of different people. I know we have gotten a lot of 
support from Aerosmith, Grateful Dead, Garth Brooks, R.E.M., and 
Neil Young. It seems like when it actually became a public issue, 
it seemed like everybody came forward and actually supported us, 
and even more so than the artists, I think the public support has 
been intense. People that really don't have verv much knowledge 
about our band or the kind of music that we play have been very 
supportive about it whether they are concert goers or they go to 
plays or opera or whatever, but it is actually really nice, you know. 

Mr. CoNDiT. Do you have contracts with your record company 
manager and agent and are those contracts exclusive? 

Mr. Ament. I think the only person that we have an actual con- 
tract with is our record company. Our agent and our manager and 
our soon-to-be with our merchandiser, too, we have just a hand- 
shake, it is people that we trust, and we talk and communicate on 
a daily basis and we kind of feel in a lot of ways that is the only 
contract that needs to exist. 

Mr. CONDIT. Can you tell us how the ticket prices are set. Who 
sets the ticket price? 



28 

Mr. Ament. The band does. We have meetings. We haven't had 
one in a while because we have all been kind of doing our own 
thing, but whether we are touring and when we are recording, we 
get together and talk about those things and actually before we 
went on tour last fall we sat around and decided that we never 
wanted the price of a ticket over the course of the next year or two 
to ever be over $20, and that is how we came up with anywhere 
between $16 and $18 so when the service charge was tacked on 
that it would never be over $20. 

Mr. CONDIT. Do you adjust your fee to accommodate it not being 
over $20? 

Mr. Ament. Actually, I think in order for us to break even or 
make money on the last couple of tours we had to set it at $18, 
and so I think there were cases when the tickets were $21 or what- 
ever, but this summer we just decided that we didn't want the tick- 
et prices to be over $20. 

Mr. CONDIT. To achieve that you work with the concert halls or 
stadiums or whatever. They receive a fee. You obviously have 
Ticketmaster, who gets their cut. Do you readjust your fee to get 
to that $20 or is your expectation for the stadium and Ticketmaster 
to readjust their profit margin to get to that $20 total? 

Mr. Ament. Well, I think we were willing to talk about that. Es- 
sentially what we did, how we came up with it, with the $18 was 
that we figured out what our expenses were. In the previous 3 
years touring, we actually lost a lot of money, and we decided that 
going into this we didn't want to get into a situation where we 
were losing money touring, and we have put on free shows. We did 
a huge show in Seattle where we actually put about $125,000 or 
more into that show, and so in order to do those sorts of things you 
have to make a little bit of money to balance it out. 

Mr. CONDIT. Why was your summer tour canceled? 

Mr. Ament. I don't laiow when the exact date was. Probably 
about 2V2 months ago. 

Mr. GOSSARD. Did you say why? 

Mr. Condit. Yes, why. 

Mr. GossARD. We dian't feel like we could coordinate — because of 
our dispute with Ticketmaster and feeling really the only way we 
could tour was to sort of go outside and try to do it on our own, 
given the amount of time we had and our feelings about security 
and whether we could actually put on a safe show consistently in 
these sort of — we would be in outdoor venues probably in fields and 
stuff, we just felt that it wasn't appropriate and we should deal 
with this issue first and focus on recording music. 

Mr. Condit. So your dispute with Ticketmaster is the reason you 
canceled your tour? 

Mr. GossARD. Yes. 

Mr. Condit. I have two real quick questions because other Mem- 
bers want to ask questions and I don't want to take all the ques- 
tion time. Have you ever done a performance and did not use 
Ticketmaster? 

Mr. Ament. Yes, on this last spring tour there were actually two 
shows. There was a show in New York and a show in Detroit where 
we came up with two alternative ways. We actually distributed the 
particular seats in New York — actually, they were both through the 



29 

box offices, but we distributed through radio stations in New York 
and in Detroit we did it through a lottery system, and it was an 
incredible amount of work. 

Mr. CONDIT. What was the price of the ticket? 

Mr. Ament. The prices were — I think they were $18 in both 
cases. 

Mr. CoNDiT. Did you think it was a success or 

Mr. Ament. I think it was a success, but like I said, it was a lot 
of work, and looking at those two situations we knew that doing 
something along those lines this summer would have been an in- 
tense amount of work. 

Mr. CoNDiT. Do you think Ticketmaster is entitled to a profit? 

Mr. GossARD. I don't think that question matters, you know. I 
think that our main concern is are we entitled to use a different 
company other than Ticketmaster and right now so far we haven't 
been able to find an alternative that is viable that we feel is fair. 
If Ticketmaster runs a good business and they make good deci- 
sions, then they should make a profit, but, you know, just like any 
good business they have got to be smart about it, too. 

Mr. CONDIT. OK I appreciate your responding to my questions. 
You have been very candid, and I appreciate that. I am going to 
turn to the chairman of the full committee and ask if he has any 
questions at this time. 

Mr. CoNYERS. Thank you, Chairman Condit. I have one question 
about Detroit. When you were there you tried a lottery system. 
Could you just tell us how that worked out and whether there were 
any repercussions as a result of that, Jeff. 

Mr. Ament. Essentially, we set up an address where people could 
mail in requests to go to a concert. I think we got — it was over 
600,000 letters for a show that I think the Masonic Temple held 
like 4,000 people or something like that, and we have pictures. It 
is prettv intense and actually Mike McGinley, he had the task of 
going through those 600,000 letters and actually picking them, 
and 

Mr. CoNYERS. Sounds like a pretty good job and lots of work. 

Mr. Ament. It failed in a lot of ways just because it was putting 
a ridiculous amount of mail through the mail system. 

Mr. CONYERS. Did Ticketmaster threaten the promoter of the 
concert as a result of your lottery effort, if you recall? 

Mr. Ament. I remember hearing something to that effect. I don't 
know if there is something in the submission or not, but — I am not 
really entirely clear on that, and if you wanted to talk to either one 
of these guys, they could probably let you in on that. 

Mr. Conyers. We will. Thank you very much. Thank you, Mr. 
Chairman. 

Mr. Condit. Thank you, Mr. Chairman. Mr. Thomas. 

Mr. Thomas. Thank you, sir. Thank you for being here. I am in- 
terested in how you do this. For instance, if you were to play some- 
where like Casper, WY, which is unlikely, I suppose. 

Mr. GossARD. Not that imlikely. 

Mr. Ament. That was actually on our wish list. 

Mr. Thomas. Was it really? You need to get out there. Who do 
you contract with? Do you contract with the event center there? 



30 

How do you do that? Who do you contract wdth for this concert to 
make the arrangements? 

Mr. Ament. Well, essentially we will send our agent an angle on 
how we want to tour and a lot of my angle, and this hasn't always 
necessarily been like the whole group's angle has been to play 
smaller places, and so we will send that list to our agent, and our 
agent will contact 

Mr. Thomas. But you don't contract with Ticketmaster, do you? 
The arrangement for selling the tickets is between the facility, 
what do you call it, a venue? 

Mr. Ament. Yes. 

Mr. Thomas. And Ticketmaster? 

Mr. Ament. Exactly. 

Mr. GrOSSARD. And our agent deals with a local promoter there 
or whoever, deals with a promoter and the promoter in turn deals 
with the venue itself, so it is sort of a chain of command sort of 
thing. 

Mr. Ament. Lots of middle people. 

Mr. Thomas. You could get lost in it, I suppose. There is a func- 
tion to distribute and sell tickets which somebody has to pay for 
and do, isn't that true? 

Who does it if Ticketmaster doesn't do it? 

Mr. Ament. Hopefully, somebody comes up with a different angle 
on it. I think if there is more than just one person providing that 
service, I think it is going to make all the services better. I think 
it is going to make Ticketmaster better, too, because I think it is 
going to snow them a different angle, you know. 

Mr. Thomas. In one concert, let's say you are in Los Angeles for 
this concert, should more than one person be able to distribute 
those tickets for the same concert? Is tnat your point? 

Mr. GossARD. That is the gist of the whole thing. We feel like 
there should be somebody else that could potentially distribute 
tickets and right now we don't feel that when our agent goes and 
sets up the shows with the different promoters and the different 
venues, you know, 90 percent, 95 percent of the time Ticketmaster 
has exclusive contracts with those venues and those promoters al- 
ready, so already you have to sort of deal with Ticketmaster be- 
cause of their contracts with the local 

Mr. Thomas. So there is two things, as I understand. One is the 
exclusiveness of Ticketmaster for this concert. They are the only 
one that can do it, and you object to that. The other is, you said 
95 

Mr. GossARD. I don't know if that number is correct, I am sorry. 

Mr. Thomas. It doesn't need to be exactly, but if you go to 100 
places in the country, how many of them will have Ticketmaster 
as their exclusive agent roughly, 10 percent, 20 percent? 

Mr. Ament. You are playing major markets, I would say it is a 
really high percentage. If you are plajdng Spokane, WA, or Mis- 
soula, MT, or someplace like that you won't be dealing with 
Ticketmaster, but 80 percent of the bands don't play those places, 
so that is where you run into problems. 

Mr. Thomas. OK, So what, and this is general, you may not feel 
comfortable with it, what is it you would like to accomplish — what 
do you think the Government ought to do? 



31 

Mr. Ament. To have an option. As a consumer going out to see 
a concert to actually go out and have a choice, you know, like a 
consumer has a choice to buy gasoline or a CD or whatever, people 
have different reasons. Some people go to the major chains because 
the CDs are cheaper, other people have, you know, a different 
agenda on where they buy their music, and they will support a 
local small one stop. 

It would be great to have locally owned ticket agencies or an- 
other — and also another national ticket agency just to provide some 
different choices. 

Mr. Thomas. So Pearl Jam tickets in Spokane ought to be avail- 
able through several outlets, that is your point? 

Mr. Ament. Yeah, that would be great. 

Mr. Thomas. Have you filed a lawsuit? 

Mr. GossARD. No, I don't think we have. 

Mr. Thomas. The answer is no? 

Mr. GossARD. No, we have not. 

Mr. Thomas. Thank you very much, I have enjoyed having you 
here. 

Mr. CONDIT. Thank you, Mr. Thomas. 

Mr, Peterson. 

Mr. Peterson. Thank you, Mr. Chairman. I know a little bit 
about the country side of the business, but I don't know much 
about the rock side. Apparently, what has happened is 
Ticketmaster has gone out and signed up all these bigger venues, 
and is that — are they requiring that there be an exclusive relation- 
ship, is that what is happening, that in order for Ticketmaster, for 
example, to deal with the bigger venues where you have 30, 40, 
50,000 folks, that there is an exclusive relationship with 
Ticketmaster to handle those tickets; is that what the situation is? 

Mr. GosSARD. That is what we think the situation is. It is hard 
to sort of determine exactly what the situation is. We can't prove 
that they have exclusive agreements with a lot of these places, but 
that has been — in trying to find other alternatives, we have always 
been forced with, well, you can use Ticketmaster or you can basi- 
cally try to do it someplace else. That has been our perception, that 
they have an exclusive agreement with 

Mr. Peterson. So your agent is finding that this hall or say the 
Metro Dome in Minneapolis or whatever, that you can't play that 
unless you use Ticketmaster, that is basically what is happening? 

Mr. GosSARD. Exactly. 

Mr. Peterson. I am trying to figure out if there is some way 
around this. I ran into this problem when I was in the State Sen- 
ate in Minnesota. The State Fair had a rule that you couldn't plav 
within 200 miles of the State Fair in that year if you booked with 
them. We have this "We Fest" in Detroit Lakes, which I have been 
involved with and played at. Anyway, we couldn't get Willie Nelson 
and some other people to play because they had this rule, so I put 
a rider on the tax bill and changed it. 

I got an editorial from the Minneapolis Tribune about my Willie 
Nelson amendment, so maybe we could do something like that 
here, Mr. Chairman. We could put some kind of rider on the budget 
bill. It is just curious to me why there wouldn't be some venues out 
there that would spring up that would sell their own tickets. For 



32 

example, of the "We Fest," we have 120,000 people who come to 
that event. We think they use Ticketmaster. Maybe that is just the 
country side of the business. 

Do you know, is there a difference to the country side of the busi- 
ness and the rock side? 

Mr. Ament. I don't think so. I think maybe the difference is that 
that is in Detroit Lakes and maybe it is just a smaller community 
and probably it doesn't make as much business sense. I have no 
idea if Ticketmaster deals with that area or not, but — and I think 
we could actually go out and probably find our own venues and find 
our own places to play shows, but that would probably take us a 
year to set that up. 

Mr. Peterson. It is just too much work to set up for each com- 
munity? 

Mr. Ament. Yes. 

Mr. GrOSSARD. You, basically, have to build the venue from the 
ground up. You have to put in the bathrooms, you have to hire the 
security, you have to do all these things and when you are not 
dealing with anyone that is normally sort of in the network of peo- 
ple that are established promoters and stuff like that, that is where 
you run into risk. Your local crew in any given show could be, you 
know, inept. You just don't know, and you are dealing with maybe 
20, 30,000 people or whatever, and that is a big risk for us. 

Mr. Peterson. You should go play wedding dances every Satur- 
day night. You never know what you are going to run into. 

Just one other thing I was curious about. I had read in the paper 
before I listened to your songs and was trying to learn "Black and 
Alive" and a couple of the other songs — I am still working on 
them — that you were trying to only play in halls that were no big- 
ger than 8,000 people or something. How does that relate to this 
particular circumstance — does Ticketmaster have those places tied 
up as well? 

Mr. GossARD. That is a different issue. That is more of the 
band's personal feelings about, you know, what kind of clubs we 
want to play, and we have played bigger shows than 8,000 people, 
and I am sure we will in the future, but during a tour we definitely 
like to mix it up as far as — ^we definitely like more intimate shows 
and maybe we will come to a place and we will play three or four 
theater shows and whatever, and then we will maybe do one sort 
of bigger event, maybe in an outlying area or whatever. That is to 
keep us happy and the fans happy at the same time. We are usu- 
ally happier in sort of more intimate environments, but we are also 
into playing big shows. It is just a matter of being able to choose 
and mix it up. 

Mr. Peterson. One more point. So you are not on tour now until 
this gets resolved, is that where you are at? 

Mr. Ament. Exactly. 

Mr. Peterson. OK. So now what happens if the Justice Depart- 
ment looks at this and decides that there is nothing wrong? You 
will decide that when the time happens? 

Mr. Gossard. We will figure something out. We are not going to 
stop touring. 



33 

Mr. Peterson. That is good to hear. I will have to come and hear 
one of your concerts when you get back on the road again. Thank 
you for being here. 

Mr. CoNDiT. Thank you, Mr. Peterson. Mr. Horn. 

Mr. Horn. Thank you very much, Mr. Chairman. I have a num- 
ber of questions that don't require lengthy Einswers, just yes or no. 
Do you believe contracts should be honored? 

Mr. GossARD. Sure. 

Mr. Horn. I take the answer is, yes, sure. 

You mentioned in your answer to a previous question that you 
do have a contract with your record company and that it is exclu- 
sive; is that correct? 

Mr. Ament. It is, but then at the same time if we went to the 
record company and said — if I went to the record company and said 
I have my own project and I want to go somewhere else with it, 
I think if we sat down and talked to them about that, they would 
let us do that. 

Mr. Horn. But right now it is an exclusive contract. 

Mr. Ament. With our band it is. 

Mr. Horn. And it is their decision whether they will let you 
break that contract in essence, not your decision, unless you want 
to 

Mr. Ament. It is our decision. 

Mr. GossARD. We have never been in a contract dispute with 
Sony. They have worked with us on every level. We have a contract 
that we have to go through the process of making because that is 
what business is all about, but we have never gone to court or had 
any sort of disagreement that we couldn't resolve as people just 
working together, and but we do have an exclusive contract with 
Sony, a signed contract. 

Mr. Horn. Of course, you mentioned your contract with your 
manager and your agent is a handshake. 

Mr. GossARD. Yes. 

Mr. Horn. That is a contract, you would agree? 

Mr. Gossard. It is a contract in our minds. That is as good as 
we feel we need. 

Mr. Horn. It would be a contract in the court's mind also, de- 
pending on who testified which way. 

Mr. Gossard. OK. 

Mr. Horn. That is an exclusive contract with your manager and 
your agent? 

Mr. Gossard. No. A handshake can't be — I mean, I can't imagine 
that you could get from that that it would be an exclusive contract. 
It is a contract. 

Mr. Horn. Well, what is the length and the duration of the con- 
tract? 

Mr. Gossard. There isn't one, it is a handshake. It is however 
long we feel like working together. 

Mr. Horn. In other words, tomorrow you could get rid of them? 

Mr. Gossard. Absolutely. 

Mr. Horn. You would claim your promoter and manager have no 
contract. 

Mr. Gossard. Exactly. 



34 

Mr. Horn. Well, that must come as news to them because they 
probably think they do. Did you receive any advance against future 
sales from your record company? 

Mr. GosSARD. We have in the past. We didn't on this record. 

Mr. Horn. OK, but you have in the past. Is that regarded as a 
kickback in the industry or what? 

Mr. Ament. I would say it is a loan. 

Mr. GosSARD. If anything, it is a loan. If they advance you 
money for a record, the way it is set up is that they advance you 
money and you make your record and, you know, then when the 
record sells you have to pay that back, so it is basically a loan. 

Mr. Horn. Have you ever spoken directly to anyone from 
Ticketmaster? 

Mr. GrOSSARD. An employee of Ticketmaster? 

Mr. Horn. Well, anyone in relation to this case from 
Ticketmaster. 

Mr. GossARD. No. 

Mr. Horn. I assume their employees, president, treasurer, who- 
ever. 

Mr. GossARD. No. 

Mr. Horn. So you have had no discussions with them on this? 

Mr. GosSARD. I personally have not had any discussions with 
them. 

Mr. Horn. Well, has any of your staff that is employed by hand- 
shake or contract? 

Mr. GossARD. I don't know, I would have to ask them. Have we 
had any discussions? Yes, our manager has. 

Mr. Horn. Could we identify the gentleman? 

Mr. GossARD. Kelly Curtis. 

Mr. Horn. That is your manager, and he has had discussions, 
even though you personally haven't had, but it is on your behalf? 

Mr. GossARD. Sure. 

Mr. Horn. Who, if anyone — is he your only person that speaks 
on your behalf or do you nave a legal counsel and others 

Mr. Ament. He is the main person that speaks in our behalf, 
and — ^yes. 

Mr. Horn. Well, do you have any contracts with Ticketmaster 
that are outstanding anywhere? 

Mr. GosSARD. I wouldn't be able to answer that question. 

Mr. Horn. Can your manager answer it? 

Mr. Curtis. No. 

Mr. GossARD. No, we don't. 

Mr. Horn. Has Ticketmaster ever refused to sell tickets to your 
concerts? 

Mr. GossARD. I think this line of questioning is very strange be- 
cause it seems like what does that really have to do with anything 
with the issue at hand here which is whether Ticketmaster is a 
monopoly. It doesn't have anything to do with our business or what 
our relationship is with our manager or our record company. It 
seems it is about whether Ticketmaster has a monopoly. I find your 
line of questioning strange in that sense. 

Mr. Horn. Well, have they ever refused to sell tickets to your 
concerts? 

Mr. GossARD. I don't know whether they have or not. 



35 

Mr. Horn. Can your staff answer it? You know, a monopoly is 
something 

Mr. GossARD. My staff has said they don't think so. 

Mr. CONDIT. You are probably aware that we do have 
Ticketmaster coming up. 

Mr. Horn. No, but I would like to know from their side, we have 
got this case in quotes "before us," which properly is probably be- 
fore the Department of Justice. We are into antitrust. The question 
is what is a monopoly, how does a monopoly function? 

You are claiming to be the victims of the monopoly. I am trying 
to get a feel for what activities alleged to have been done by the 
monopoly make you feel you are a victim. 

Now, one would sure make me feel I am a victim if I wanted to 
sell tickets and they refused to sell tickets to my concert, and I 
take it the answer is they have never refused; is that correct? 

Mr. Ament. No, you are right. 

Mr. Horn. You are right? They have never refused to sell tickets 
to your concert? 

Mr. Ament. If there is any information where there might have 
been some weird innocence that — ^it is in the submission that you 
have. 

Mr. GossARD. You can read that. 

Mr. Horn. OK When you perform, who does the deal on behalf 
of the band? Is it your manager, and I assume the manager would 
be the equivalent of the promoter? Is that combined or is there a 
separate promoter? 

Mr. Ament. Well, if we are doing our own shows, like we did in 
Seattle in December, Kelly would have been the promoter, but nor- 
mally we go through our agent, and our agent goes through a local 
promoter or a regional promoter. 

Mr. GossARD. If you have any more business questions we can 
put some of our business people up here and you can ask them spe- 
cifically. 

Mr. Horn. Well, that is your discretion. You are the witness, 
they work for you, so you use your judgment when you would like 
them to reply. That is fine. 

Mr. GosSARD. I am using that judgment right now. If you have 
any more business questions, you can ask them. 

Mr. Horn. Please have them sit with you. No use us turning 
around craning our necks. Let's just get it on the record. Now, I 
gather 

Mr. CoNDlT. Mr. Horn, do you want these guys to play Long 
Beach or not? 

Mr. Horn. What I want is a record here, and would the gen- 
tleman identify himself please that just joined you. 

Mr. McGinley. I am Mike McGinley. I am the band's business 
manager. 

Mr. Horn. The band's business manager, OK I don't understand 
how this works. 

Mr. CONDIT. Excuse me, Mr. Horn, I apologize for interrupting 
you. We are going to have to swear this witness in if he begins to 
answer questions. I apologize to you. 

Would you raise your right hand, please? 

[Witness sworn.] 



36 

Mr. CoNDiT. The record would indicate he answered in the af- 
firmative. Would you please introduce yourself for the record. 

Mr. McGiNLEY. I am Mike McGinley. I am the band's business 
manager. 

Mr. Horn. Spell the last name. 

Mr. McGinley. M-C-G-^I-N-L-E-Y. 

Mr. CoNDiT. Now, that is clear. Mr. Horn, you may proceed. 

Mr. Horn. As I understand it, the Ticketmaster operates on be- 
half of a particular arena, building, whatever they call it, and they 
have a contract with them, and I guess my query to you in terms 
of your interaction, does that contract, in your judgment, prevent 
any securing of the band or anything or is that your exclusive deci- 
sion as an artist? 

I am just trying to get how this system works. 

Mr. McGinley. I don't understand your question. 

Mr. Horn. Well, as I understand it, Ticketmaster has a 

Mr. McGinley. I am sorry. 

Mr. Horn. Let's take the Long Beach arena, it has been men- 
tioned or let's say arena X in some city. We have a contract with 
Ticketmaster to sell the tickets that relate to events in that arena. 

Mr. McGinley. That is correct. 

Mr. Horn. All right. As you look at it from your standpoint, is 
that simply to sell tickets or do they in any way relate to other as- 
pects of your performance, such as securing the band or whatever? 

Mr. McGinley. Whether we go play a venue, Ticketmaster pro- 
vides the service just to sell the tickets. 

Mr. Horn. OK, nothing else, simply the tickets? 

Mr. McGinley. Simply the tickets. 

Mr. Horn. Now, what type of arrangement do you basically have, 
then, with the arena besides Ticketmaster on the tickets or a mer- 
chandiser or £inything else? Are those exclusives when you go to a 
city? Is there only one person you really can deal with or one en- 
tity? 

Mr. McGinley. There are a lot of different choices when a band 
goes on tour. They have to make certain decisions on what they 
want to do in given areas, and when they make certain decisions 
in many cities like, for example, if you want to play Manhattan, 
you have to play Madison Square Garden. If you want to play that 
level of venue, yes, there is no other place in Manhattan to play 
other than Madison Square Garden. 

Mr. Horn. OK. Now, I understand from listening to the testi- 
mony it is the band leadership itself, the group's leadership that 
sets the ticket prices. 

Mr. McGinley. In the case of this band, the band sets the ticket 
prices. 

Mr. Horn. Now, is there any service charge ever added when you 
do these outside of a Ticketmaster venue? I mean, do you have an 
additional service charge or is it just a flat fee they decide on and 
that covers all your expenses, whatever they are? 

Mr. McGinley. There is a cost of selling tickets, and no matter 
whoever sells the tickets, yes, there is a fee to sell tickets no mat- 
ter how you do it. Someboay has got to pay to sell the tickets. 

Mr. Horn. As I understand it, then, the basis of your dispute 
seems to be down to about 50 cents between what you want 



37 

Ticketmaster to charge versus what they claim their basic service 
charge is. Are we talking about a 50-cent difference here? 

Mr. McGlNLEY, I don't know how you arrived at that figure. 

Mr. Horn. Well, let's say an $18 ticket and the band said that 
is what they would like to perform at and they seem to feel 
Ticketmaster is keeping them from that because they have a serv- 
ice charge that would ticket over $20, and let's say an $18 ticket 
has a $3.50 service charge- 



Mr. McGlNLEY. That is $21.50, by 

Mr. Horn. That would ticket over. 

Mr. McGlNLEY. By $1.50. 

Mr. GrOSSARD. Our concern is whether Ticketmaster has a mo- 
nopoly and whether we have viable choices to go out and sell tick- 
ets for a national tour in major cities by any other means, and 
right now we don't, so that seems to be the real issue here, not 
about what the final discrepancies in our particular arguments 
with Ticketmaster are about, our affairs with them or whatever. It 
is all about being able in the future for any band and anyone to 
be able to go and sell a ticket through a company that is going to 
treat them fair, and it seems strange that we are focusing on our 
business activities, our specific business activities rather than the 
bigger picture, which seems to be the important overriding issue. 

Mr. McGlNLEY. If you go to the State of Utah there is an exclu- 
sive or just one ticket company in the State of Utah, and their serv- 
ice charges range from $1 to $2.65 maximum, which would be sig- 
nificantly less than Ticketmaster is charging. 

Mr. Horn. Well, we will pursue it on the next round. We have 
other members of the committee who want to ask questions. 

Mr. CONDIT. I would like to yield to Mrs. Thurman from Florida. 

Mrs. Thurman. Do you also get involved with the concessionaires 
as far as the selling oi T-shirts, hats, posters, and booklets? 

Mr. McGlNLEY. As with tickets, the band made a conscious deci- 
sion to only charge $18 for their T-shirts, and because of the fees 
that venues charge, if we couldn't lower that percentage, it would 
have been unprofitable to sell tickets, so we negotiated fees with 
most of the venues on the last tour where at least we could charge 
the $18 for the T-shirts. 

Mrs. Thurman. Is there a monopoly in that? 

Mr. McGlNLEY. The building has the right to set T-shirts. They 
can charge — ^you have to negotiate a fee with them. 

Mrs. Thurman. What do you think is a reasonable charge for a 
ticket sale? 

Mr. McGlNLEY. To sell tickets? 

Mrs. Thurman. Yes. 

Mr. McGlNLEY. Competition should determine that. 

Mrs. Thurman. So if there was competition and it actually could 
raise prices in some cases, what do we do? 

Mr. GossARD. Then we are all screwed. 

Mr. McGlNLEY. I think there is plenty of examples in the briefs 
that you have that show that there is a lot of ticket companies op- 
erating around the country that aren't charging $3 and $4, so 

Mrs. Thurman. I just wonder what percentage people think that 
the parties involved ought to have. I live in a very rural part of 
Florida; very, very, rural part of Florida, and, my option of being 



38 

able to purchase a ticket might be through somebody Hke that 
since I can't get to one of the larger cities here there may or may 
not be two or three ticket services. 

I don't Hve in Miami. I don't Hve in Tampa. I don't Hve in Jack- 
sonville, and so for some of us where an organization has taken the 
time to set up the service it really provides a valuable service to 
us. 

Mr. GossARD. We have never argued whether Ticketmaster can 
provide a good service or not. They can get tickets anywhere in the 
United States efficiently on some level. 

Mrs. Thurman. So in some cases they actually help some of your 
fans? 

Mr. GosSARD. I wouldn't — That has never been part of our— defi- 
nitely. 

Mrs. Thurman. So your only issue is the contractual part of it 
between 

Mr. GossARD. Whether or not Ticketmaster is an illegal monop- 
oly or not, that is what our main concern, because we feel that they 
are. 

Mrs. Thurman. Are there a lot of other ticket sellers out there? 
Is there a reason why they have got a monopoly or has this just 
evolved? 

Mr. GossARD. I wouldn't be able to answer that question. 

Mr. McGlNLEY. There is a whole — without getting into too much 
detail, I think pretty much what Ticketmaster has done is they 
have gone around the country and they have bought up all the 
local competition in all the major cities. I mean, you could 

Mrs. Thurman. I am not sure how to respond to that, to be hon- 
est. They have just done exclusives within these places and not al- 
lowed other people in. Are there other people tnat have actually 
been in on these? Do you know? 

Mr. McGlNLEY. I am sorry. 

Mrs. Thurman. Are there other people that have actually tried 
to get contracts in these buildings? Do we know? 

Mr. GossARD. Has anyone ever tried to go up against 
Ticketmaster? 

Mr. McGlNLEY. Not in the last 4 or 5 years, I don't think. 

Mrs. Thurman. OK, Good luck. 

Mr. Condit. Mr. Stupak from Michigan. 

Mr. Stupak. Thank you, £md welcome to the committee. Go back 
to 1991, Justice Department says it was OK for Ticketmaster to 
buy out Ticketron and in a way Ticketmaster sort of became the 
exclusive person or individual or entity to handle tickets. Did any 
of the groups back in 1991, any of the artists or musicians support 
Ticketmaster's application with the Justice Department to allow 
them to purchase? Do you know? 

Mr. GossARD. What were we doing in 1991? 

Mr. Ament. I am not sure if there were bands who supported it. 
From my just general knowledge of a lot of bands, it is a bottom 
dollar thing. It is like however much money they can make regard- 
less of what the service charge is, that is what they are interested 
in, and we have a different agenda when we tour. 

Mr. GosSARD. We have had that tour agenda for years and years 
and years, and I think the record shows tnat we have always been 



39 

concerned with keeping ticket prices low and doing things sort of 
at a grassroots level. 

Mr. Stupak. You know, I appreciate what you are trying to do, 
trying to keep the flow and again I come from a very rural, small 
district, large district geographically, but very rural. When you 
start getting into tickets $30, $40, $50, $60, basically you price out 
a lot of people, so I appreciate what you are trying to do. 

I guess the point I am trying to make is what happened between 
1991 when Justice Department — and I have to correct the gen- 
tleman from Wyoming where he said the Clinton administration. 
That was back in the Bush administration where they allowed this 
monopoly to develop, if you will. What happened between 1991 and 
1994? 

Have the prices, the service fees gone sky high? Have they 
stayed the same, have they stayed flat, do you know? 

Mr. Ament. It seems like particularly this summer if you look at 
the ticket prices, and it has been big news, the Eagles and Barbra 
Streisand and all those people, I think with the ticket prices going 
up I think the service charges have gone up, too. 

Mr. McGlNLEY. Service charges have increased significantly 
since 1991. 

Mr. Stupak. In 1991 was there a percentage, be it 5 percent, 3 
percent that a service charge was and has that service charge 
stayed the same or has the service charge, proportion of the service 
charge increased since 1991? 

Mr. Gk)SSARD. There is no proportion. That is one of the problems 
we have. There is no designated proportion of the ticket price that 
Ticketmaster charges. I mean, it is a random or seemingly random 
amount for every ticket, having more to do with the marketplace. 
That is what it seems like at least. 

Mr. Stupak. So conceivably you are a hot band right now, so 
they can sell your tickets, so they could put out a higher service 
charge than tney would for someone else who might be on the 
downside? 

Mr. GosSARD. That is why it is such a weird incident because we 
are a big selling band, but yet we are trying to do a lower ticket 
price than a lot of other bands so there is a very good opportunity 
for Ticketmaster to want to tack on as much money as they can, 
knowing that our tickets will sell for, you know, as much as $50, 
$100, you know, scalpers can get. 

Mr. McGlNLEY. It is hard in a 10-minute discussion here to go 
into the whole history and research behind ticket pricing, et cetera. 
I mean, I could certainly make myself available and we certainly 
made all our staff available to the Justice Department to help you 
people research this, but in this 10-minute timeframe you really 
can't do it justice to explain to people and have people knowledge- 
able of what is really going on, so I guess that is kind of some of 
the, you know, reservedness in our questions — in our answers. 

Mr. CONDIT. Mr. Stupak, may I interrupt vou for a minute? 
There are some other questions other Members have. We are going 
to let them ask their questions, but with your comment would you 
agree if some Members wanted to submit written questions to you, 
you could respond to them in a little more detail? 

Mr. McGlNLEY. Absolutely. 



40 

Mr. CONDIT. Mr. Stupak. 

Mr. Stupak. One more question, if I may. What if a show cancels 
or if for some reason it doesn't come on, the refund, hopefully, 
there is a refund to the consumers. Is there a service fee then? Is 
that service fee kept then by Ticketmaster or is the whole price re- 
funded, if you know? 

Mr. McGlNLEY. I believe recently Ticketmaster has refunded the 
service charge. Up to a point in time, I believe about 2 years ago 
they kept the service charge, and there was a court case, I believe, 
in Oregon or Seattle or somewhere when Michael Jackson canceled 
a show where Ticketmaster did not want to refund the service 
charge, but in the last several years they are definitely refunding 
service charges on canceled shows. 

Mr. Stupak. You testified earlier that you wanted or I read in 
your testimony you wanted the service charge to be printed on the 
ticket so people would know. 

Mr. Ament. Yes. 

Mr. Stupak. Is that one of the reasons whv? 

Mr. Ament. That is part of our whole philosophy to educate peo- 
ple on what is going on, not just to 

Mr. McGiNLEY. People should know what they are paying for. I 
mean, we have product labeling, people should know what they are 
paying for. 

Mr. GOSSARD. If there was natural competition, that is exactly 
the kind of thing that would keep prices down, if someone could see 
that every time they bought a Ticketmaster ticket they were add- 
ing $4 on their ticket and somebody else was only adding $2 on, 
that is what is going to create the kind of situation we are looking 
forward to in the future. 

Mr. Stupak. To your business manager, then, do any States right 
now require you to do that? I am from Michigan. I don't think we 
do. I don't think we put down every charge that is on that ticket, 
and I know Ticketmaster is there in there. Do you notice of any 
States 

Mr. McGlNLEY. I don't know the answer to that, but I know that 
in California because Ticketmaster was not printing or advertising 
ticket prices in most ads, especially in Los Angeles anymore be- 
cause there was no place you could really go to buy a ticket for that 
price because they were not putting the service charge in the ads, 
and so they don't put ticket prices in ads anymore. 

Mr. Stupak. What about on the ticket stub, if I purchased a tick- 
et for $20, is it $15, $5 for handling or 

Mr. GosSARD. It doesn't split it up. 

Mr. McGiNLEY. That was one of the problems we had with 
Ticketmaster for a show in Chicago. They were insisting on an all- 
in price on the ticket and we want it broken out so the fans could 
really see what they were paying for the service charge. 

Mr. Stupak. Thank you. And thank you, Mr. Chairman. 

Mr. CONDIT. If I might, since you have been on the service 
charge, I would just like to ask quickly, should handling charges 
be per order or based instead on per ticket. 

Mr. McGiNLEY. If you are doing a mailing, there certainly is a 
charge to mail things. OK, on a per order basis so anybody that is 



41 

mailing an order can recover the cost of what it costs to mail tick- 
ets or whatever. I don't think that is unfair. 

Mr. CONDIT. A family goes in and buys six, seven tickets, should 
they be charged per ticket for handling or should they be charged 
a unit price? 

Mr. GossARD. The market, hopefully, should be able to figure 
that out, too. If there is natural competition, all those things will 
be sorted out. 

Mr. CoNDiT. Ms. Woolsey. 

Ms. Woolsey. Thank you, Mr. Chairman. I have to tell you, I am 
sorry I wasn't here for my opening statement, so I want to say a 
little bit of my thoughts on this. First of all, I want you to know 
I think you are just darling guys. This has been great. 

When my staff told me we were going to have this hearing, I 
have to tell you, I knew nothing about grunge. But I know a lot 
about the importance of fairness and equity, and I think you have 
raised some very important questions. This is just not an issue for 
your band, we are talking about sporting events, rock and roll fans 
all over the country, and theater fans. I think you have opened a 
lot of good questions for us to be talking about now. We have to 
determine carefully what we need to be doing about this and re- 
spond appropriately. 

One thing for sure is that the most sought after ticket here is 
the ticket to consumer fairness. Because we all know that the 
music won't rock if the consumers get rolled. So what I want to ask 
you is something that kept confusing me as you were talking. Are 
you looking at being able to have the choice as a group of your tick- 
et distributor or are you looking at the consumer having a choice? 

The reason I ask is it worries me that if more than one distribu- 
tor in an area is working with you, how do you protect from over- 
selling? I am concerned about that. 

Mr. GosSARD, I am not sure I know exactly what you are asking. 
We would love choices for both the fans ana ourselves. Ideally, we 
would like to have our choice as far as finding a ticket distribution 
company that we feel we can work with and, of course, we want 
the fans to enjoy a natural marketplace to determine how much a 
fan pays for their tickets so the checks and balances are sort of in 
place. 

Ms. Woolsey. I understand that in the big picture, but when you 
get right down to the number of tickets and the number of people 
that can come in, how do you protect from dual ticketing and over- 
selling? 

Mr. Ament, They used to have a system that was called commu- 
nicating. 

Mr. McGlNLEY. In 1994, with the sophistication of computers, it 
seems pretty easy to figure out how we can sell tickets at a venue. 
It is not that difficult, but once again, I don't know, the half-hour 
discussion that it would take to snow you how to do it, that this 
is the appropriate place to do that. 

Ms. Woolsey. I think I will do that, I will ask that question be- 
cause I think it needs to — ^you don't want to put yourself in a place 
where consumers are getting ripped off from another direction. I 
would like to know why you were the first group to bring this to 
national attention. 



42 

Why do you think that you did that? 

Mr. Ament. I think that is the way we have always done things. 
I think in a lot of other levels, whether it be with our record com- 
pany or the merchandising industry or whatever, I think the way 
that we have done things has changed the way people perceive 
doing things, and it just doesn't seem fair to us the way a lot of 
things are done in the music industry right now, and having been 
a fan and having been a consumer for many, many years, I don't 
want to become something that I despised as a kid, or something 
that I got upset over as a kid and a music fan, and so we are just 
trying to carry through with just our gut feelings on a lot of that 
stuff. 

Mr. GosSARD. I think we have been in other bands, too, and not 
so successful bands and plajnng music for a long time, and you cer- 
tainly learn a lot. We have put out our own records, you know, on 
independent labels. Jeff has always done the art work. We have al- 
ways been very hands on in that regard, so in doing that you start 
to really learn what the business sort of is about and I think that 
maybe we have just had our hands involved in it a little bit more 
than a lot of people so we have become aware of a lot of issues that 
other people do not have in their frame of reference. 

Ms. WooLSEY. I have to ask another question that has nothing 
to do with monopolies. What does Pearl Jam mean or does it have 
a meaning? 

Mr. GosSARD. I am not going to answer that question. 

Mr. CoNDiT. You guys can go silent if you would like. If you want 
to answer the question, it is fine as well. 

Ms. WooLSEY. OK, thank you very much. 

Mr. CONDIT. We have done a round of questioning here and you 
guys have been really kind with your time, and we appreciate it 
very much. I do have to let Mr. Horn have another round of ques- 
tioning. If you noticed, this thing appears a little lopsided. This 
side has got a few more people, so we want to give Mr. Horn a little 
more time, so indulge us for a few moments and he is aware that 
he can submit some questions in writing and you may want to say 
that if you don't want to respond to questions. 

Mr. Horn. 

Mr. Horn. Mr. McGinley, you are probably the proper one to an- 
swer some of these. They get a little technical, and I will be asking 
similar questions of all witnesses. 

On a typical date for this group or any group with which you 
have been familiar in your own past, how many tickets really go 
on sale to the public versus the promoter holds, the band holds and 
so forth? What are we talking about 80 percent go on sale, 90 per- 
cent? 

Mr. McGinley. It is really hard to be specific because every situ- 
ation is different, OK? Specifically, with Pearl Jam we hold a very 
limited number of seats, so most of the seats can go on sale to the 
general public. There are certain seats that need to be held to take 
care of certain needs that they have, but for the most part a great 
majority of the seats go on sale to the general public. 

Mr. Horn. Pick a figure. What generally are we talking about? 



43 

Mr. McGiNLEY. It is tough because it depends on the size of the 
venue, but I would say 300 or 400 tickets would be held and every- 
thing else would go on sale to the general public. 

Mr. Horn. A typical venue you would have how many seats? 

Mr. McGlNLEY. 3,000 to 10,000. 

Mr. Horn. Grenerally, you hold out about the same number. 

Mr. McGlNLEY. Yes. 

Mr. Horn. OK 

Mr. McGlNLEY. The smaller shows we will take a few less. 

Mr. Horn. Now, do you usually use a local promoter or do you 
and your colleagues on the staff really handle most of the pro- 
motion no matter where you go? 

Mr. McGenley. Local promoters. 

Mr. Horn. You get a local promoter. Did you play any events 
where you didn't use Ticketmaster? I heard some referred to that 
you didn't want to use Ticketmaster, but have you seen 

Mr. McGlNLEY. There were a couple of shows where we sold tick- 
ets through the box office. 

Mr. Horn. I am told that in a lot of arenas, maybe 80 percent 
of the tickets are sold through the box office. What is your feeling 
on that? 

Mr. McGlNLEY. My experience would be probably not, but I don't 
know. 

Mr. Horn. What do you feel it is half and half, what? 

Mr. McGlNLEY. One thing, there is no question or no answer to 
that question because depending on who the artist is and the size 
of the venue and how fast tickets sell, there are 10 different vari- 
ables that will determine when and where and how tickets sell, so 
it is a difficult question to answer. 

Mr. Horn. My bias as a consumer is, one, I don't like service 
charges and so I know what you are talking about, and two, I pre- 
fer to go to the box office because I always feel I am getting lousy 
seats when it is automated, so I want to see what is the makeup 
of the arena. Is the column right in front of my seat or whatever, 
and my understanding based on my staffs analysis of statements 
of Ticketmaster is they claim they only sell 20 percent of a venue's 
tickets and that the venue sells roughly 80 percent. 

Mr. McGlNLEY. For concerts I would dispute that. 

Mr. Horn. You would dispute it? 

Mr. McGlNLEY. Absolutely. For Pearl Jam that is definitely not 
true. At the Los Angeles Forum I don't even think the box office 
is open for day-of-show sales. That could have changed, but I don't 
think so. I don't think they are open. 

Mr. Horn. So your experience is that you mostly have had to 
deal not only with Ticketmaster, but with what other similar type 
operations? For instance, the Shubert organization. 

Mr. McGlNLEY. I think that there may be three or four excep- 
tions, but at every show we did on the last tour we used 
Ticketmaster. There is really no option. 

Mr. Horn. For the major arenas you are saying? 

Mr. McGlNLEY. For the major arenas or even in the major cities. 
In major cities in this country there is really no other option other 
than Ticketmaster. 



44 

Mr. Horn. Have you or anyone representing your group ever par- 
ticipated in the service charge revenue? 

Mr. McGiNLEY. No. 

Mr. Horn. And that would obviously include both Ticketmaster 
and nonTicketmaster venues? 

Mr. McGlNLEY. There was an instance where a couple shows we 
did on the last tour, the Ticketmaster local affiliate randomlv 
raised the service charge 25 cents. That 25 cents was rebated back 
to the band. We took the money and gave it to a local charity. 

Mr. Horn. What venue was that? 

Mr. McGiNLEY. Atlanta and Rochester, Fox Theater. 

Mr. Horn. Did you ever ask Ticketmaster to increase its service 
charge? 

Mr. McGiNLEY. No. 

Mr. Horn. Were you ever playing in Seattle, December 1993? 

Mr. McGiNLEY. Yes. 

Mr. Horn. And you didn't ask them to increase the service 
charge? 

Mr. McGiNLEY. There was a long, complicated negotiation that 
I think is set out in one of the briefs. I was not involved in that 
negotiation, but there would be a 15-minute story to explain the 
facts. I don't think after hearing that 15-minute story, or after 
reading the brief, you would determine or you would say that we 
asked Ticketmaster to raise the service charge, no way. 

Mr. Horn. Do you believe organizations such as Ticketmaster, 
whether it be Shubert or Ticketron, when it was going, provide a 
valuable service? 

Mr. McGiNLEY. Ticketmaster does provide a valuable service, 
yes. 

Mr. Horn. How would you put a value on that? How does one 
value that? 

Mr. McGiNLEY. I can't answer that question. I don't know. 

Mr. Horn. The reason I ask is I looked at Ticketmaster's com- 
plete financial report for 1993. They have a strange year. The year 
ends in January 31, 1993, so it is that year I am looking at. They 
had income of $172,003,000, and they had a net income, which I 
guess we could call profit, although I am not positive, we will ask 
them, of $7.5 million. 

Now, that meant that basically they had a profit of 14 cents per 
ticket. Would you regard that as unreasonable? 

Mr. McGiNLEY. I haven't seen those figures. I would like to ana- 
lyze them before commenting on it. I think there are a lot of people 
other than Ticketmaster with the system that Ticketmaster has set 
up that are participating that aren't reflected on that statement, 
but I can't comment on it. I haven't seen it. I think they are mak- 
ing more than 14 cents. 

Mr. Horn. You accuse them of being a monopoly. A monopoly, 
if it is, can be very inefficient. Let's face it. A lot of charges cover 
a lot of costs, but just the way the numbers happen to work out 
when the staff went over it was 14 cents per ticket. 

Now, did Ticketmaster ever threaten to sue you or other mem- 
bers of the organization? 

Mr. McGiNLEY. I don't know. They have never directly threat- 
ened to sue me. I believe our attorneys were warned. 



45 

Ticketmaster's attorney did contact Sullivan and Cromwell in New 
York. 

Mr. Horn. To your knowledge, did they ever threaten to sue any 
of the arenas or promoters with whom you were dealing because 
you were involved? 

Mr. McGlNLEY. Say that again. 

Mr. Horn. Did Ticketmaster ever threaten to sue any of the are- 
nas in which you were seeking to operate or the local promoters or 
regional or national promoters with which you were affiliated in re- 
lation to any of the business of your particular group? 

Mr. McGenley. Not having been (Erectly in on those phone calls, 
but there was definitely some very tense conversations between 
arenas that we have played and Ticketmaster officials, yes. 

Mr. CONDIT. Mr. Horn 

Mr. McGiNLEY. I don't know if lawsuits were threatened. 

Mr. CONDIT. Can you wrap this up in a few minutes? We have 
been at this for about IV2 hours. 

Mr. Horn. I have about five questions to go. 

Mr. CONDIT. Could you submit some of those in writing? 

Mr. Horn. Well, let's just get them rapidly through here. It will 
save everybody a lot of time. 

Mr. CONDIT. I would advise you, if you want to submit them in 
writing, just say so, the answers. 

Mr. McGiNLEY. OK. 

Mr. Horn. Well, it creates a problem on followup questions, so 
if you are willing to take followup questions to your submissions, 
fine, we can do that, realizing you are still under oath when you 
answer in writing. 

Mr. Ament. We still want to make sure that the other panel 
members get a chance to talk about this stuff. 

Mr. Horn. We are here all day. 

Mr. Ament. They told us we were going to be here for an hour. 
Actually, I have to go to the bathroom, so I will be right back. 

Mr. Horn. We can understand. 

What are we talking about in terms of how much the band really 
makes in terms of profit on each concert? You are concerned with 
Ticketmaster's profit, it seems to me fair we get on the record what 
your profit is. 

At an arena, in a stadium, at a field, in those three different set- 
tings, what are we talking about average profit? 

Mr. McGenley. It is an imiK)ssible question to answer because, 
once again, there are probably 10 different variables. I could sit 
down and have a 1-hour conversation with you about it, but we are 
not going to answer it here correctly in 1 minute. 

Mr. Horn. Could you go back and reflect on it. I know you do 
big venues, little venues, medium-sized venues, what not, but can 
you give us a general average, because I think it is important if 
we have got a 14 cents per ticket profit here then what is the 
group's profit? Is this the pot calling the kettle black? 

Mr. McGiNLEY. Depending on where you are playing and what 
city it is and the ticket price, there is a million, literally a million 
variables that would determine what the band makes. Honestly, 
there is not a real percentage I can give you. 



46 

Mr. CoNDlT. Mr. Horn, once again, the gentleman has answered 
the question. If he says he doesn't know, he can't explain it, that 
is an answer, and you can follow up, so let's take that. 

Mr. McGiNLEY. Let me give you for an example here OK, on the 
show the band did at the Paramount, they basically broke even in 
New York because of the cost of the venue. There were other shows 
where they made maybe 25, 30 percent of gross. It is all over the 
place. 

Mr. Horn. Do answer for the record if you feel you can give a 
more substantive answer. 

Now, let's get down to the nub of this because we are taking one 
service in relation to a particular venue that is very common, 
which is the ticket service. Do you believe you should be able to 
decide all of the services, all of the concessionaires in an arena, 
such as the food, beverage, signage, parking as well as ticketing? 

Mr. McGlNLEY. Mr. Condit, I think in fairness to really answer 
your questions, I should write answers to your questions, and we 
should move on because this is 

Mr. Horn. Let me just ask two more then. 

Mr. Condit. No, Mr. Horn, if you want to submit. 

Mr. McGinley. I would be more than happy to spend all the 
time you need. 

Mr. Condit. He said he would submit his answers in writing. 
Would you agree to that? 

Mr. Horn. It would take a yes or a no. Do you have a contractual 
or other relationship or are you talking currently to the Shuberts 
or Telecharge? 

Mr. McGinley. No. 

Mr. Horn. Are you planning to go on a tour in the near future? 

Mr. GossARD. We don't know. 

Mr. Condit. Is that fine? 

Mr. Horn. That is fine. 

Mr. Condit. Thank you, Mr. Horn. That concludes today's first 
panel. We are not going to do another round of questioning, but 
don't leave yet. Stone. I want to invite you, if you are willing to 
do so, to stay at the hearing. We would love to have you stay, out 
let me just say when we got involved in this issue, I did not know 
very much and still don't about alternative music. I just want to 
say to both of you, to Stone and to Jeff, I am not a big alternative 
music fan, and I am not sure that any of the Members up here are, 
but you have represented yourself and your industry very well 
today. 

You have been very kind with your time, and I think you have 
been very thoughtful. No matter how this turns out, you have done 
a g^eat service to the subcommittee, and we appreciate your being 
here. Now, that endorsement may not help you with your fans, but 
I want you to know that you did a good job. 

Mr. Gossard. The government's band, you mean? 

Mr. Condit. The government's band. Thank you very much. We 
appreciate you being here. We have a seat for you if you want to 
take it. Jeff maybe nad a good idea. Let's take a 5-minute recess. 

[Recess taken. 1 

Mr. Condit. We are going to reconvene the hearing. I appreciate 
the moment of recess, and we are going to ask panel two to come 



47 

forward. Mr. Collins, Mr. Downs, Mr. Marsh, Mr. Morris, and Mr. 
Rascoff. Please stand and raise your right hand. 

Excuse me, apparently there is still some out in the hall. Would 
you notify them in the back if they are back there or out in the 
hall that we are ready for panel two. 

Mr. Marsh, Mr. Downs? Raise your right hand. 

[Witnesses sworn.] 

Mr. CoNDiT. The record would indicate everyone answered in the 
affirmative. We are going to start with Mr. Collins. Mr. Collins is 
the manager of Aerosmitn, and he is from Boston, and we appre- 
ciate Mr. Collins being here today. We appreciate your patience. 
We know you have been here all morning. If you have a written 
statement, this goes for anyone here. If you have a written state- 
ment and you want to submit it into the record, that will be done, 
and you can paraphrase your statements or if you feel more com- 
fortable in reading your statements, you can do that as well. Mr. 
Collins. 

STATEMENT OF TIM COLLINS, MANAGER, AEROSMITH, 

BOSTON, MA 

Mr. Collins. Thank you. Mr. Chairman, members of the sub- 
committee, thank you for inviting me to testify here today. My 
name is Tim Collins. I am from Boston, MA, and I am the manager 
of Aerosmith, one of the world's most popular rock and roll bands. 
Please allow me to supply you with some quick background. 

Aerosmith has sold over 50 million recordings, and we estimate 
that as many as 20 million fans have seen Aerosmith live in con- 
cert, most of those in the United States. Currently, they are in the 
midst of a veiy successful world tour from whicn I have just re- 
turned to testity here today. 

The band and I are all concerned about the impact that 
Ticketm aster's monopoly is having on the entertainment industry. 
We view this as a very simple matter. You are either on the side 
of the fans and the artists or you are on the side of the middlemen 
who are in control of the American concert industry. 

We recognize that Ticketmaster's monopoly provides a more effi- 
cient ticket ordering and distribution system than America had 
ever seen before. Its advanced systems have upgraded and sup- 
ported the economic vitality of the concert business. But at a price. 

Last week, I was with Aerosmith in Italy, where the band is cur- 
rently on tour. We were talking about Ticketmaster and how it re- 
lates to our concert business. Steven Tyler, Aerosmith's lead singer, 
said to me: "Mussolini may have made the trains nm on time, but 
not everyone could get a seat on that train." That is the problem 
that Aerosmith and I have with Ticketmaster. 

Yes, they have an efficient and profitable system, but its monopo- 
listic aspects are unfair and hurtful. It hurts the fans who pay 
service charges that inflate ticket prices an average of 15 percent, 
according to estimates. 

It hurts younger, developing artists who find that tickets to 
smaller clubs where they learn their crafl are subject to surcharges 
averaging as much as 25 percent, according to estimates in the 
Boston Globe. 



48 

It hurts the music industry by encouraging scalping and other 
forms of profiteering, such as withholding large blocks of tickets for 
resale by sometimes disreputable elements. 

Ticketmaster's monopoly controls access to between 85 and 90 
percent of the tickets sold in the Nation's major music performance 
venues, covering 42 States. 

On our current "Gret A Grip" tour, Aerosmith will sell some 2 mil- 
lion tickets. Most of those tickets will be sold through 
Ticketmaster. Not because we want to, but because we have to, as 
a result of Ticketmaster's exclusive and unregulated agreements 
with promoters and venues. Ticketmaster is the only game in town 
for artists and fans. 

Over the years, we have heard a lot of stories from Aerosmith 
fans who slept all night on hard pavements outside box offices 
waiting for them to open in the morning. Even the first kids in line 
were unable to get the best seats because Ticketmaster's telephone 
sales commonly begin hours, if not days, before box offices open. 

Later we found that some of these seats had been bought at pre- 
mium prices from someone who knew somebody. So our fans are 
robbed, the band is robbed, and the government is robbed of tax 
revenue on illegally inflated ticket prices. 

Aerosmith's determination to provide a way around 
Ticketmaster's restrictive distribution policies and fees has led us 
to support an Aerosmith fan club whose members can buy good 
seats to our concerts with only a minimal service charge. I would 
like to relate my own story of an encounter with Ticketmaster's 
Fred Rosen as an example of how business is done when a band 
is dealing with a monopoly. 

In 1989, we approached Ticketmaster at the beginning of an ex- 
tended world tour for which we expected to sell millions of seats. 
We were seeking a volume rebate in consideration of the enormous 
amount of business we were doing with this company. We either 
wanted Ticketmaster to lower its service charge or pay some kind 
of rebate to the band so that Aerosmith could in turn lower the 
ticket charge to its fans. 

Rosen was unwilling to support us on either of these courses of 
action. 

Once again, at a meeting I personally had with Mr. Rosen on 
January 5, 1993, at the start of negotiations for our current world 
tour, we came back to the very same issues. Once again, Rosen re- 
sponded to our proposals by refusing either of these options. In- 
stead, Mr. Rosen suggested that if the band would agree to adver- 
tise the ticket price and the service charge together as one single 
cost, he would raise Ticketmaster's charge by $1 per ticket and 
split the proceeds with the band. 

I told Mr. Rosen that his offer was like offering a cold man ice 
in the winter. Admittedly, his solution would make us and him 
more money, but at the expense of an already overburdened young 
fan. 

The moral of this story is that monopolies like Ticketmaster tend 
to raise prices and rarely, if ever, lower them, even for their best 
customers. 

Aerosmith believes that Ticketmaster's nearly absolute power 
over access and fees on performance tickets is corrupting the sys- 



49 

tern and working to the disadvantage of an entire industry and its 
consumers. 

Competition is the American way, and as a result of 
Ticketmaster's monopoly position, there is almost no competition in 
the ticket business anymore. Artists trying to buck the system, like 
Pearl Jam, have been threatened and blacklisted. Consumers are 
bein? forced to pay too much to buy tickets. Many good seats are 
withheld from the market and resold at exorbitant profits that are 
shared neither with the artist nor the tax man. 

Mr. Chairman, Ticketmaster operates an unfair and unregulated 
monopoly whose actions, Aerosmith believes, are not in the public 
interest. Aerosmith urges this committee and Congn:-ess to restrain 
Ticketmaster's monopoly. We support the view that the entire tick- 
et distribution system needs to be open to greater competition, and 
if Federal regulations are needed to ensure this, we would support 
them. 

We would also like to see a uniformity of regulations, since dif- 
ferent States have different laws on the resale of tickets. This leads 
to the current epidemic of ticket scalping and other illicit sales. 

In conclusion, Mr. Chairman, monopolies have for centuries sup- 
ported the interests of tyrants. Mussolini's trains and 
Ticketmaster's ticket systems may run well, but they don't run 
right. 

Mr. Chairman and members of the subcommittee, I thank you for 
the opportunity to appear before you today, and I look forward to 
answering any questions. 

[The prepared statement of Mr. Collins follows:] 



50 



STAJEMEN'L-O.F TIM COLLINS TO THE H OUSE GOVERNME^NT OPERATIONS 
COMMITTEE 'S SUB-C OMM I TTE E ON I NF ORMAT I ON , JUS T I CE . T RANSPOR TAT I ON 

AND AGRICULTURE 



WASHINGTON. DC 
JUNE 30. 1994 



Mr Chairman, and members of this sub-committee, thank you for 
inviting me to testify here today. 

My name is Tim Collins. I am from Boston, Massachusetts and I 
am the manager of Aerosmith, one of the world's most popular rock 
n ■ roll bands . 

Please al low me to supply you with some quick background. 

Aerosmith has sold over 50 million recordings and we estimate 
that as many as 20 million fans have seen Aerosmith live in 
concert. Currently they are in the midst of a very successful 
world tour, from which I have just returned to testify here 
today . 

The band and I are al I concerned about the impact that 
T i cketmas t er ' s monopo I y is having on the entertainment industry. 

We view this as a simple matter. 

You're either on the side of the fans and the artists, or you're 
on the side of the middlemen who are in control of the American 
concer t industry. 

We recognize that T i eke tmas t er ' s monopoly provides a more 
efficient ticket ordering and distribution system than America 
had ever seen before. Its advanced systems have upgraded and 
supported the economic vitality of the concert business. But at 
a price. 

Last week I was with Aerosmith in Italy, where the band is 
currently on tour. We were talking about Ticketmaster and our 
concert business. 

Steven Tyler, Aerosmith's lead singer, said to me: 

"Mussolini may have made the trains run on time, but not everyone 
could get a seat on that train." 

That's the problem that Aerosmith and I have with Ticketmaster. 

Yes, they have an efficient and profitable system. But its 
monopolistic aspects are unfair and hurtful. 



51 



-2- 



It hurts the fans who pay service charges that inflate ticket 
prices an average of 15%, according to estimates. 

It hurts younger, developing artists who find that tickets to 

sma I ler clubs, where they learn their craft, are subject to 

surcharges averaging as much as 25%, according to estimates in 
The Bos ton G I obe . 

It hurts the music industry by encouraging scalping and other 
forms of profiteering such as withholding large blocks of tickets 
for re-sale by sometimes disreputable elements. 

T i cketmas t er ' s monopoly controls access to between 85 and 90% of 
the tickets sold in the nation's major music performance venues, 
covering 42 states. 

On our current 'Get A Grip' tour, Aerosmith wi I I sel I some 2 
million tickets. Most of those tickets will be sold through 
T i eke tmaster . Not because we want to, but because we have to, 
as a result of T i cketmaster ' s exclusive and unregulated 
agreements with promoters and venues. 

Ticketmaster is the only game in town for artists and fans. 

Over the years, we have heard a lot of stories from Aerosmith 
fans who slept al I night on hard pavements outside box offices, 
waiting for them to open in the morning. 

Even the first kids in line were unable to get the best seats, 
because T i eke tmaster ' s telephone sales commonly begin hours, if 
not days, before box offices open. 



Later we found that some of these seats had been bought 
premium prices from someone who knew somebody. 



at 



So our fans are robbed, the band is robbed, and the government 
is robbed of tax revenue on illegally inflated ticket prices. 

Aerosmith's determination to provide a way around T i cketmas ter ' s 
restrictive distribution policies and fees has led us to support 
an Aerosmith Fan Club whose members can buy good seats to our 
concerts with only a minimal service charge. 

I'd like to relate my own story of an encounter with 
T i eke tmaster ' s Fred Rosen as an example of how business is done 
when a band is dealing with a monopoly. 



52 



-3- 



In 1989 we approached Ticketmaster at the beginning of an 
extended world tour for which we expected to set I mill iona of 
seats. We were seeking a volume rebate in consideration of the 
enormous amount of business we were doing with this company. We 
either wanted Ticketmaster to lower Its service charge or pay 
some kind of rebate to the band, so that Aerosmith could in turn 
lower the ticket charge to its fans. Rosen was unwilling to 
support us on either of these courses of action. 

Once again, at a meeting I had with Fred Rosen on January 5th 
1993, at the start of negotiations for our current tour, we came 
back to the same issues. Once again, Rosen responded to our 
proposals by refusing either of these options. Instead, Mr Rosen 
suggested that if the band would agree to advertise the ticket 
price and service charge together, as one single cost, he would 
raise T i eke tmas t er ' s charge by $1 per ticket and split the 
proceeds with the band. 

I told Mr Rosen that his offer was like offering a cold man ice 

in the winter. Admittedly his solution would make us and him 

more money, but at the expense of an already overburdened young 
f an . 

The moral of this story is that monopo I i es I ike Ticketmaster tend 
to raise prices and rarely, if ever, lower them, even for their 
best customers. 

Aerosmith be I i eves that T i cketmas t er ' s nearly absolute power over 
access and fees on performance tickets is corrupting the system 
and working to the disadvantage of an entire industry and its 
consumers . 

Competition is the American way and as a result of T i cketmaster ' s 
monopoly position, there is almost no competition in the ticket 
business any more. 

Artists trying to buck the system, like Pearl Jam, have been 
threatened and blacklisted. 

Consumers are being forced to pay too much to buy tickets. 

Many good seats are withheld from the market and re-sold at 
exorbitant profits that are shared neither with the artist or the 
tax man. 

Mr Chairman, Ticketmaster operates an unfair and unregulated 
monopoly whose actions, Aerosmith be I ieves, are not in the publ ic 
i nt er est . 



Aerosmith urges this committee and Congress to restrain 
T i cketmaster ' s monopoly. 



53 



-4- 



We support the view that the entire ticket distribution system 
needs to be open to greater competition, and if federal 
regulations are needed to ensure this, we would support them. 

We would also like to see a uniformity of regulations, since 
different states currently have different laws on the re-sale of 
tickets. This leads to the current epidemic of ticket scalping 
and other illicit sales. 

In conclusion, Mr Chairman, monopolies have for centuries 
supported the interests of tyrants. 

Mussolini's trains and Ticket ma ster's ticket system may run well, 
but they don't run right. 



Mr Chairman and members of the sub-committee, I thank you for the 
opportunity to appear before you today and I look forward to 
answering your questions. 



54 

Mr. CONDIT. Our next witness is Mr. Downs. Mr. Downs is the 
attorney for R.E.M. and he is also a professor for the University of 
Georgia School of Law. Thank you for being here today. 

STATEMENT OF BERTIS DOWNS, ATTORNEY, R^.M., AND AD- 
JUNCT PROFESSOR, UNIVERSITY OF GEORGIA SCHOOL OF 
LAW, ATHENS, GA 

Mr. Downs. Good morning, thanks for letting me be here. I live 
in Athens, GA, As you said, my name is Bertis Downs. I am the 
attorney for the group R.E.M. , a popular rock band that I have rep- 
resented since I graduated from law school in 1981. As you also 
said, I teach part-time at the University of Greorgia School of Law 
where I teach courses on entertainment law and sports law. Also, 
for the last 2 years I have served as the music division chair of the 
American Bar Association's Forum Committee on the Entertain- 
ment and Sports Industries. 

I mention these affiliations for identification purposes only, and 
emphasize that the views I am about to ofFer are mine alone and 
not necessarily the views of any organization with which I am asso- 
ciated. 

My views spring principally from my representation of R.E.M. 
The band was founded in 1980 and has given hundreds of live per- 
formances since then. Right now, R.E.M. is actively considering an- 
other major tour, possibly as early as 1995. Since my own work 
largely concerns these tours, I have had a chance to observe all of 
the many business components that make up the live music tour- 
ing industry. If you don't mind, I am going to take a second to 
draw — I am going to get into my teacherly mode. 

I want to draw on the blackboard to show how a deal is put to- 
gether. There have been a lot of questions, trying to get at sort of 
the macro part of all this and I want to try to provide a framework 
or a context for you to understand how this particular corner of the 
music touring industry, ticket sales, relates to the rest of it, and 
I then want to make a larger point about that. 

It is a very simple relationship between talent, which I will just 
put a T for talent, the act, maybe I should put a PJ there, which 
enters into a contract with a promoter, which I will indicate with 
a P. Generally, that is a local promoter. There are certainly pro- 
moters that have a national reputation, that have national clout 
and can kind of go anywhere, but the typical situation is that in 
Long Beach you are going to deal with a promoter for Long Beach, 
and when you move up to San Francisco you are going to deal with 
a promoter from San Francisco, when you come down our way to 
Atlanta you are going to use somebody there. That is your basic 
contractual relationship, between an artist and a promoter. 

There is a contract issued. It is issued through an agent which 
is a very important intermediary that is sort of the fulcrum be- 
tween this relationship. The agent is directly between talent and 
promoter. The band surrounds itself with sort of this cocoon of rep- 
resentatives. The representatives would include attorneys, personal 
managers, a business manager, and, as I mentioned, an agent. 
There are others — and I guess you can also put some of the tour 
personnel like a tour manager. Incidentally, I can't think of very 
many bands who would have come and sat at this table today and 



55 

stripped away all those layers of that cocoon, so as other people 
have said, it is pretty laudable that these guys did that. That typi- 
cally is the team of representatives, the sort of committee that is 
around the band that makes — that in conjunction with the band, 
to some degree, decides things like ticket prices and where they 
want to play and whether it is going to be indoors or outdoors and 
exactly the shape and the philosophy of the tour. 

The talent is represented by all these people. They then have to 
contract with a lot of third parties. They have to hire the produc- 
tion, which includes things like sound companies, lighting compa- 
nies, companies that build stages and sets, then the companies that 
truck all those things around and put people in buses. It is a pretty 
heavy-duty operation. Major tours might have a couple hundred 
people on the road at any given time. 

Those people have relationships with crews, production man- 
agers, additional musicians, and other support functions on doing 
a tour. There is a merchandising aspect of this, selling the T-shirts 
and novelties. The merchandisers are a third party that directly 
contract with the band. 

Finally, the record company has a lot of impact on this. The 
record company might provide things like tour support. They might 
help promote the tour, and there is, again, another third-party re- 
lationship there, that all kind of plugs in through this part of the 
equation, talent. 

The promoter, on the other hand, has to first secure a site or a 
venue. The promoter has to hire a lot of support services, things 
like transportation companies, security companies, catering compa- 
nies, advertising agencies, all these things. That is the promoter's 
job to put the show on and to hire these various support compa- 
nies. 

I forgot to put a very important one over here on the talent side, 
which is insurance. The band has to buy its own insurance, the 
promoter has to buy its own insurance, which includes coverage for 
liability if somebody gets hurt at the show, and for nonappearance, 
rain, if something happens the show can't go on. There are insur- 
ance companies representing both sides of mis. Then the promoter 
also has to sell the tickets to the fans, and typically in 1994, at 
least for the last few years, they have had to go through 
Ticketmaster and ultimately the fan gets to buy the ticket through 
the promoter and come to the show. That summarizes the basic 
business relationships created when a national-scale tour dis- 
embarks. 

I have made a little bit more readable form of this for the com- 
mittee. I don't know the procedure for letting you guys — I have 
done sort of a chart that helps to lay that out because you see it 
has got a lot of interlocking relationships. The point I really want 
to make is kind of the only point I want to make today is that if 
you look — don't look at board, it is kind of ugly, if you look at that 
chart, with all these various relationships on the talent side, the 
promoter side, all the various third parties that are contracted 
with, with the exception of one place, there is competition. 

There are lots of business managers out there. If Mike McGinley 
stopped doin^ a good job for these guys, there are other people that 
could take his place. I doubt that will ever happen, but there are 



56 

lots of business managers out there. There are six maior record 
companies, so they may have an exclusive contract with that record 
company, but if that contract is ever up, and in some band's career 
if they are fortunate, maybe it will eventually be up. They can go 
somewhere else. They can go down the street or across the country 
and they can contract with another record company. 

There is also intense competition among promoters. There are lit- 
tle hometown promoters and there are big national promoters. 
Thev vary in scope and sU'le, and there are various promoters who 
work with certain types of music. There is a lot of competition. 

When a band is coming into Atlanta or coming into Long Beach, 
promoters vie with each other. They make offers, they have a price 
competition to secure the services of the band. In all these areas, 
support services, the tour, the production company, sound, lights, 
again, it is all based on price and other intangible types of competi- 
tion. It is part of the key to the working of the system. There is 
one exception. 

At this point in 1994, for at least the last few years, there really 
isn't any choice. If you want to do a major tour, a major arena level 
tour in major markets, you have no choice. It comes along with the 
building. It comes along with the building the same way conces- 
sionaires do. Ticketmaster is the company through which the fans 
have to buy tickets and the promoters have to use to be able to put 
the shows on sale. That is, to me, sort of a way of explaining, and 
I hope through the chart there that you are able to follow that and 
to see how the ticket distribution aspect of that fits in. 

I have had plenty of experiences as a consumer and as a profes- 
sional with the Ticketmaster system. It is a good, efficient system, 
no doubt about it. It provides a valuable service, and Ticketmaster 
is entitled to make a profit, as any other business in our country 
is able to do. However, I think what we have here is a situation 
where there is no price competition among various ticket services. 
Instead there is one that rules and that determines unilaterally, or 
in conjunction with its "partner" promoter or building the service 
charge portion of a ticket. 

I want to explain one other little thing about that. Ticket prices, 
as it has come out already today, ticket prices are really two major 
components: The event portion of the charge, which is the price 
people pay, the $18 or whatever that people pay to come view the 
show, and then the service or handling charge or convenience 
charge that is added above that. Ticket prices are determined — 
there has been a lot of talk about ticket escalations and things get- 
ting expensive in Eagles shows and Barbra Streisand shows and 
the things that are out there approaching $100 or more. But those 
changes are still governed by a marketplace. 

If the group or the attraction has decided to set their tickets too 
high, thev are not — they don't have the kind of altruistic ideals, 
they don t have the kind of ideology that you have heard about 
today. They have just decided they are going to go higher, they are 
going to push it, they are going to make as much money and retire 
to their castle. Well, if they price themselves out of the market by 
pricing the tickets too high, people won't come to the show. 

However, the service charge part of the ticket, which is substan- 
tial, it is somewhere — it is hardly ever less than 10 percent, and 



57 

it is often as high as 25 percent of the overall cost of the ticket. 
That is determined really, it may be determined by some sort of 
calculation between promoters and the provider, but it is by and 
large determined by a single provider of the service, what could, I 
think, be characterized fairly as a monopoly. 

There may be some problems in the system which have been 
highlighted about tickets not being sold at box offices, people not 
being able to get seats, I am not sure there is a limit to how high 
these service charges can go, given the lack of competition. There 
isn't that market competition. 

I want to contrast that with the situation in Europe. 
Ticketmaster, as far as I know, at this point in time, is not selling 
tickets in Europe. Ticket charges in Europe, which I guess we can 
kind of roughly compare our economies with, are somewhere in the 
neighborhood of around 5 percent. 

Somebody asked earlier, the Congresswoman from Florida asked 
what is a reasonable charge. I think the answer was really a mar- 
ket should determine what a reasonable charge is, but where the 
market does work, if you want to buy a ticket to a concert in Lon- 
don you have your choice of five ticket agencies and the service 
charge is somewhere in the neighborhood of 5 to 7 percent, as op- 
posed to what we are seeing which is approaching a much more 
significant fraction of the overall price. The reason this is impor- 
tant to bands, I think you have been able to — I think we all were 
able to tell from the testimony of the two members of Pearl Jam, 
the reason this is important to bands is because fans may — ^wheth- 
er it is broken out on the ticket price or not, fans in a sense blame 
the band for what they are having to pay. They don't really know 
the politics, they don't know the ins and outs of how this stuff 
works. They just know how much they are having to pay to go to 
the show. 

If the price gets too high, if it gets to the price where it is 
unaffordable to the fans, it is really the band's goodwill. It is Pearl 
Jam's goodwill. It is R.E.M.'s goodwill. That is who ends up bearing 
the brunt of the fans feeling pinched or squeezed by this charge. 

I want to close, and I have put a lot of this in my statement 
which I think I have already submitted for the record, but I want 
to close with just a little story that used to happen whenever 
R.E.M. would tour. They haven't toured since 1989, so they haven't 
toured during the current situation. As I said, we are very seri- 
ously considering touring again next year and this will become a 
very important issue to us, and it already has, but up until 1989, 
the band R.E.M. used to tour, and they were always real big in 
their hometown or close to their hometown of Atlanta. 

Whenever they came to Atlanta to play, one of their several 
nights at the Fox Theater before they gpraduated up to playing the 
Omni, we would get a call. We had always used a company called 
SEATS, which is a predecessor company to Ticketmaster in At- 
lanta. We had always used SEATS because they had good outlets, 
they had reasonable charges, and the main thing was they had 
good locations. They had good locations in a particular record store, 
which was the most popular record store, and the kids could go 
there to buy their seats. 



58 

We would always get a call every couple of years whenever a 
show was being scheduled from a competitor who ran a company 
called TickExpress. We weren't as impressed with TickExpress. 
They didn't have the connections that SEATS had at the time. 
They weren't in the same locations. They were in some sort of far 
out malls that really didn't make as much sense for the average 
fan to go buy their tickets and so we always said thanks for calling, 
we will consider it and we ended up never going with the competi- 
tor. We stayed with SEATS — we had loyalty to the original 
ticketing company we had, but the point I want to make is we did 
get that call: there was a competitive element to it. If SEATS had 
decided to jack things up to the point of unreasonableness, we 
could easily have stopped doing business with them and gone to 
their competitor, gone somewhere else. 

Those potential entrants to the market aren't happening any- 
more. That is no longer there. That element of competition isn't 
there. As I face planning a tour for next year, I really sincerely 
hope that between the various things that are going on right now, 
between what Justice is doing and your political oversight, I don't 
know what the solution is to this, but I really hope that some break 
in the logjam occurs because I really don't see this being a work- 
able system, having the price set unilaterally by someone who has 
this much market power. 

I really thank you for letting me be here and I think as somebody 
said, they don't know much about alternative music. I am not sure 
how appropriate a tag like alternative music is anyway, and Pearl 
Jam, who is an alternative rock band like R.E.M., I think really, 
somebody said what are you looking for, what is the solution to 
this, is it divestiture, is it government regulation? I am not sure 
anybody here really wants to provide any kind of a blueprint of an- 
swers for this, but I think what we are really looking for is an al- 
ternative to the present system. 

I think what we are looking for is other ways of doing things 
rather than having to go through a single source. Those are my 
comments and I appreciate very much you letting me speak. 

Mr. CoNDIT. Thank you, Mr. Downs, for that fine presentation. 

[The prepared statement of Mr. Downs follows:] 



59 



HOUSE GOVERNMENT OPERATIONS SUBCOMMITTEE ON INFORMATION, 
JUSTICE, TRANSPORTATION AND AGRICULTURE: 



"Pearl Jam 's Antitrust Complaint: Questions About Concert, Sports, 
and Theatre Handling Charges and Other Practices " 



Testimony of Bertis Downs 

My name is Bertis Downs. I live in Athens, Georgia I am an attorney for the 
group R.E.M., a popular rock band that I have represented since I graduated from law 
school in 1981. I am also an Adjunct Professor of Law at the University of Georgia 
School of Law, where I offer courses in Entertainment Law and Sports Law. For the last 
two years I have served as Music Division Chair of the American Bar Association's 
Forum Committee on the Entertainment and Sports Industries. I mention these affiliations 
for identification purposes only, and emphasize that the views I am about to offer are 
mine alone and not necessarily the views of any organization with which I am associated. 

My views spring principally from my representation of R.E.M. The band was 
founded in 1980 and has given hundreds of live performances since then. Right now, the 
band is actively considering another major tour, possibly as early as 1995. Since my own 
work largely concerns these tours, I have had a chance to observe all of the many 
business components that make up the live music touring industry. 



60 

The main point I would like to make today is that the concept of competition is at 
the root of the entire concert industry except in the area of ticket distribution. The live 
music touring industry itself is a complex, interlocking web of relationships: 

-within a given geographical market, there is a competition among promoters, 
who vie with each other for the right to offer a particular concert by a particular artist; 

-there is also competition among venues or sites for concerts, which offer 
different locations, different sizes, different prices and different amenities; 

-there is certainly competition among attractions, relating to various levels of 
groups' careers, artists' styles, changing public tastes, and so forth; 

-there is competition among the many companies that offer local support services- 
security firms, caterers, limousine companies and the like-which provide ancillary 
services for concert touring groups; 

-there is competition too among various touring support companies - soimd 
companies, lighting companies, trucking companies, busing companies, companies that 
provide special effects, and companies that provide stages and sets; and 



61 

-there is also competition among the several major merchandisers of novelties and 
clothing at concerts. 

For all of these indispensable elements of successfully mounting a show or tour, 
competition is the key to the working of the system. But this is not true in one critical 
area, that of ticket distribution. There, for all intents and purposes, Ticketmaster has 
become the only game in town. There is no market or choice available to would-be 
customers in the industry. They must deal with Ticketmaster. 

Is Ticketmaster good at what it does? Yes. Does Ticketmaster provide a valuable 
service with efficiency and effectiveness? Again, yes. Without a doubt, Ticketmaster 
provides a valuable service and is good at getting tickets into the hands of consumers. For 
these reasons, my comments should not be taken as anti-Ticketmaster. Instead, they 
should be taken as pro-competition, and more specifically pro-price-competition. 

To make my point, I would like to shift the focus to the other major component of 
the popular music business - the recorded music industry. In that business- which along 
with concert revenues represents the bulk of an artist's earning potential- there are six 
major distributing companies responsible for about ninety percent of domestic record 
sales. Can anyone imagine a benefit that would obtain if at some point, for whatever 
reason, that were only one such distributing label? I cannot. The benefits of a 
competitive system are clear, especially when contrasted with the alternative of 



Qi/1 n _ 0"^ — 3 



62 



concentrating all power into a single provider of a product marketed to virtxially all 
Americans. 

Without market competition to consider, a monopolist can raise its prices, cut its 
services, and reduce its flexibility without fear of a competitor winning away its 
customers. I believe that this is the basic reason the antitrust laws were put into effect 
more than a century ago - to ensure healthy competition among businesses for the benefit 
of consumers and the overall economy. 

How do these policies bear on the issue of concert-ticket distribution? To 
answer that question it is important to recognize that ticket prices are really made up of 
two major components--the "event" portion of the price paid actually for attending the 
concert, and the "handling", "service", or "convenience" charge levied by Ticketmaster 
for its services. It is also important to note that the Ticketmaster portion of the total 
charge is always significant- - in some cases as much as 20-25% of the ticket price, and 
seldom less than 1 0- 1 5%. 

In other words, a substantial portion of the price of virtually every concert ticket 
sold in this country is set by the exercise of unregulated monopoly power. Moreover, this 
particular type of market power carries with it some special dangers. For example, the 
total price of the ticket is typically "blamed" on the artist, even though the "handling 
charge" portion of the ticket is not normally attributable to the attraction at all. 



63 

Everyone is aware of escalating ticket prices for concerts. The event portion of 
these prices, however, is determined by market forces. If Band X charges too much for 
its show, the fans will stay home or attend another concert. Handling charges for ticket 
distribution, on the other hand, are shaped not by what the market will bear, but what the 
single provider decides to charge. Under the present system, without the leavening effect 
of market competition, is there a limit to the escalations seen in recent years with regard 
to handling charges? 

I would like to relate in closing a simple but true story that might provide some 
insight into my main contention, that reintroducing competitive forces into the 
entertainment ticket distribution industry would be a wise and useful policy to pursue. 
R.E.M., the group I represent, toured a great deal prior to Ticketmaster's ascendancy to 
its dominant position. During that period, when a tour stop was planned for R.E.M.'s 
close-to-hometown of Atlanta, I would get a call from the owner of TickExpress, one of 
the then-two ticketing companies competing for Atlanta concerts. He would try to sell me 
on his firm's ability to do the business for our shows, highlighting its outlets, charges and 
efficiency. We never shifted our business to TickExpress from SEATS, largely because 
SEATS had superior locations including a popular record-store chain. I always 
appreciated knowing, however, that we had a choice, a viable alternative in the event we 
ever decided that a change would be advantageous. As I look ahead to plarming a possible 
tour for R.E.M. in the years to come, I would like to get those types of calls again. We 
certainly do from all the other tour-related services. And for such a critical service- the 



64 

service of actually putting fans in seats- it seems genuinely off course to see a total lack 
of competition. 

I would like to thank the committee for inviting me here today, and I hope that my 
comments have helped you in your understanding of this aspect of the concert industry. 



65 




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66 

Mr. CONDIT. Our next witness is Mr. David Marsh, who is a rock 
and roll historian. Once again, if you want to submit your written 
testimony and paraphrase, you are welcome to do that, whatever 
you are comfortable with, Mr. Marsh. 

STATEMENT OF DAVE MARSH, ROCK AND ROLL HISTORL^N, 

NEW YORK, NY 

Mr. Marsh. Thank you, Mr. Chairman. My name is Dave Marsh, 
My interest in this subject is both professional and as a music fan 
and historian. For the past 25 years I have written about rock and 
roll as a journalist, critic, historian, and author of 15 books. I 
would like to comment today on the history of the rock concert 
business, communicate some problems uncovered by my research 
and suggest a possible resolution. 

In the late 1960's, a new style of music and performer required 
a new kind of concert. The old multigroup package shows dis- 
appeared in favor of solo concerts — or at most two or three acts on 
a bill — which were held in theaters, ballrooms, small concert halls, 
and eventually in arenas and stadiums. 

For a variety of reasons, among them competence, practicality, 
and basic loyalty, a select number of promoters of these new style 
shows became entrenched. Competition among these promoters has 
rarely been more than nominal, except in the largest cities. Even 
there, a third option is a rare thing. 

While the contemporary concert business lacks the central direc- 
torate of the classic cartel, the fact remains that these promoters 
observe unspoken boundaries, going to great lengths to avoid in- 
vading each other's territories. Where possible they acquire lever- 
age through exclusive arrangements with buildings and through 
old-boy style associations with acts and agents. 

All this severely hampers the rise of alternative promoters. One 
consequence over the past decade or so: The principal promoters in 
Philadelphia, Boston, and New Jersey have all signed consent de- 
crees relating to anticompetitive practices. Now, stars, managers, 
agents, and venues are used to operating within a monopolistic or 
at least an uncompetitive structure. Many prefer it that way and 
understandably so. 

In a night-to-night business which is usually conducted far from 
everyone's home base, familiarity, experience, and stability become 
extremely attractive. Ticketmaster's role in the concert industry 
and particularly the extreme latitude it has been granted emerges 
directly from this context. On what other terms would the idea of 
a mere ticket seller dictating business terms to a star attraction 
make any kind of sense? 

No matter what happens here today and no matter what the Jus- 
tice Department resolves to do, business as usual in the concert in- 
dustry is over, and it ended because of a single concert attraction, 
but what that doesn't mean is that this dispute is ultimately be- 
tween Ticketmaster and Pearl Jam. 

If that were the case, this forum would be entirely inappropriate 
and the entire issue would have been blown far out of proportion. 
What makes this hearing appropriate is the dispute between 
Ticketmaster and growing numbers of disgruntled ticket buyers. 



67 

buyers of tickets not only to rock concerts but to other entertain- 
ment and sports events. 

When they complained to the Justice Department, Pearl Jam be- 
came the standard bearers of that dissatisfaction. In order to better 
understand the ticket buyer's perspective, I recently posted mes- 
sages on CompuServe's Rock Net computer bulletin board. The re- 
sponses I received reflected a large degree of dissatisfaction with 
Ticketmaster's prices, which did not surprise me. The responses 
also revealed some Ticketmaster practices that did surprise me. 

For instance, I was aware that Ticketmaster's service charge ap- 
plied to each and every ticket in an order, even though not one ad- 
ditional key stroke is necessary to sell the customer eight tickets 
rather than one, and additional costs for those eight tickets for 
paper stock and printing are very minimal. What I didn't know was 
that in Detroit, Chicago, and Cincinnati, Ticketmaster, through an 
arrangement with certain facilities, adds a parking fee, not to each 
order, but to each ticket. 

In other words, if seven fans arrived in a single van, they would 
pay 7 times more for parking than a single gas guzzler. This is 
true, for instance, at Detroit's Chene Park, which Chairman Con- 
yers mentioned earlier and having lived in that vicinity, that is 
even stranger to me because I know there is plenty of free parking 
available in the neighborhood and, in fact, some people in that 
community may even walk to that show. Nevertheless, if they buy 
the ticket they must pav to park. 

Even more than the high fees, I learned the practice of applying 
the service charge and tne other charges to every ticket rather 
than to every order aggravates consumers. Public statements by 
Ticketmaster indicate that an important justification for these 
charges involves the company's sophisticated computer system. 
When I raised this, I just about got laughed off CompuServe. 

The second most commonly cited complaint is dialing 
Ticketmaster and receiving a busy signal sometimes for hours on 
end, A sophisticated computer system would find a way to cue 
calls. All of us are all too familiar with such telephone cues. I think 
that is another reason why Congressman Horn doesn't like to buy 
tickets that way. A sophisticated computer system would ensure 
that a group of four reserved seats at a Pearl Jam show were 
grouped together, and it could also make a price distinction be- 
tween reserved seat shows and general admission concerts. At 
present, the service charge for a GA show where seats are first 
come, first served — and in some cases there are no seats — is exactly 
the same as for a show with reserved seating. 

Actually, this summary is somewhat deceptive. In any discussion 
of ticketing among consumers the majority of complaints are about 
ticket scalping. These are addressed to everyone in the chain of ac- 
cess from venue employees to the acts themselves, and it must be 
said that Ticketmaster s reputation in this regard is much better 
than its predecessor Ticketron, which Ticketmaster absorbed 3 
years a^o. 

Scalpmg, per se, is under investigation presently by the New 
York State Attorney Greneral and has received much scrutiny by 
the California State government as well. It is a side issue here, but 
an important one. Ticketmaster's absorption of Ticketron is of the 



68 

essence, however. Ticketron had a similar stranglehold on the off- 
site ticket market through the early 1980's and industry dis- 
satisfaction led to the development of its rival. But from the 
consumer point of view, Ticketmaster has resolved few if any of the 
problems that Ticketmaster presented. Its service charge per ticket 
rather than per order exacerbates those problems. 

Competition can alleviate some of this. In Portland, OR, one of 
the few areas where Ticketron still faces a competitor or at least 
a meaningful competitor, service charges are, for instance, mark- 
edly lower. But this industry's instinct, as I said, is to avoid com- 
petition, and as I said, there are some sound reasons for avoiding 
that competition. 

Given this history, I don't think it is any longer reasonable to as- 
sume that the concert industry is going to self-regulate. But maybe 
having a single ticket service operating across all forms of culture 
from sports to opera, maybe that even has some consumer advan- 
tage in the way that we are moving to a more technological society. 
If that is the case, then I believe we should declare ticket services 
a kind of utility subject to governmental oversight if not full scale 
regulation. 

I know that this goes against the current governmental trend, 
but what we are dealing with here is not only the entertainment 
industry. We are dealing with what has become an important and 
for many of us perhaps the most important facet of contemporary 
culture, and I think that is true for millions of people. The most 
significant evil a ticket monopoly creates is access to popular cul- 
ture only for those who can pay very high premiums. This is folly 
in the first place because it is precisely the egalitarian nature of 
American popular music which has made it so powerfully attractive 
not only here but in the world market, and it is folly in the second 
place because what may seem like mere amusement to any of you 
may be what strikes someone else to the core of their soul. 

Rock music does this far more often than those who are not part 
of its culture suspect, and it does it by speaking clearly to and for 
people who in many cases have no other popular voice — public 
voice. From Elvis to Bruce Springsteen, America's best popular mu- 
sicians have interacted with and affected their audiences in exactly 
this fashion. This tradition is now carried on by Pearl Jam, who 
come here today not as litigants asking for dollars, but as citizens 
asking for iustice, and not even justice for themselves, but justice 
for those who are less powerful than they are. 

If we are going to deal with these problems constructively, it 
ought to be in that spirit, which is the spirit of rock and roll. 
Thank you. 

[The prepared statement of Mr. Marsh follows:] 



69 



Statement by Dave Marsh 

My name is Dave Marsh My interest in this subject is both professional and as a music fan and 
concertgoer. For the past 25 years, I've written about rockn'roll as journalist, critic, historian and 
author of fifteen books Today, I'd like to comment on the history of the rock concert business, 
communicate some problems uncovered bymy research, and suggest a possible resolution 

In the late Sixties, a new style of music and performer required a new kind of concen The 
old multigroup package shows disappeared in favor of solo concerts (or at most, two or three acts 
on a bill) in theatres, ballrooms, small concert halls, and eventually arenas and stadiums For a 
variety of reasons— among them, competence, practicality and basic loyalty—a select number of 
promoters of these new-style shows became entrenched Competition among these promoters has 
rarely been more than nominal, except in the largest cities— New York and Los Angeles. Even 
there, a third option is a rare thing While the contemporary concert business lacks the central 
directorate of the classic cartel, the fact remains that these promoters observe unspoken 
boundaries, going to great lengths to avoid "invading" each other's territories. Where possible, 
they acquired leverage through exclusive arrangements with buildings and old boy-style 
associations with acts and agents All this severely hampers the rise of alternative promoters One 
consequence Over the past decade or so, the principal promoters in Philadelphia, Boston and 
New Jersey have signed consent decrees relating to anticompetitive practices. 

Now stars, managers, agents, and venues are used to operating within a monopolistic-or 
at least, uncompetitive— structure. Many prefer it that way Understandably so In a night-to-night 
business, usually conducted far from home base, familiarity, experience, and stability become 
extremely attractive Ticketmaster's role in the concert industry, and particularly the extreme 



70 



latitude it has been granted, emerges directly from this context. On what other terms would the 
idea of a mere ticket-seller dictating business terms to acts and audiences make sense'' 

No matter what happens here today, and no matter what the Justice Department resolves 
to do, business-as-usual in the concert industry is over. It ended because of a single concert 
attraction. But that doesn't mean that this dispute is ultimately between Ticketmaster and Pearl 
Jam If that were the case, this forum would be entirely inappropriate, and the entire issue blown 
far out of proportion. What makes this hearing appropriate is the dispute between Ticketmaster 
and growing numbers of disgruntled ticket buyers— buyers of tickets not only to rock concerts but 
to other entertainment and sports events. When they complained to the Department of Justice, 
Pearl Jam-intentionally or not— became the standard bearers of that dissatisfaction. 

In order to better understand the ticket buyer's perspective, I recently posted a message on 
CompuServe's Rocknet computer bulletin board. The responses I received reflected a large 
degree of dissatifaction with Ticketmaster's prices, which did not surprise me. The responses also 
revealed some Ticketmaster practices that did surprise me. For instance, I was aware that 
Ticketmaster's service charge applied to each and every ticket in an order—even though not one 
additional keystroke is necessary to sell the customer eight tickets rather than one, and additional 
costs for paper stock and printing are minimal But I didn't know that in Detroit, Chicago and 
Cincinnati, Ticketmaster, through artangement with certain facilities, adds a parking fee, not to 
each order but to each ticket. In other words, if seven fans arrive in a single vehicle, they pay 
seven times more than a gas-squandering loner This is true for instance at Detroit's Chene Park 
which, having lived in the vicinity, I know has plenty of free street parking. Even those who walk 
to the concert must pay Ticketmaster for parking. 



71 

Even more than the high fees, I learned, the practice of applying the service charge to 
every ticket, rather than to each order, aggravates consumers Public statements by Ticketmaster 
indicate that an important justification for these charges involves the company's sophisticated 
computer system. This got a big laugh on CompuServe, since the second most commonly cited 
complaint is dialing Ticketmaster and receiving a busy signal, sometimes for hours on end. A 
sophisticated computer system would find a way to queue calls. (All of us are all too familiar with 
being placed on hold in such queues.) A sophisticated computer system would ensure that a group 
of four reserved seats at the Pearl Jam show were grouped together-and it could also make a 
price distinction between reserved seat shows and General Admission concerts At present, the 
service charge for a G.A. show, where seats are first come, first served (and in some cases, there 
ARE no seats) is exactly the same as for a show with reserved seating 

Actually, this summary is somewhat deceptive. In any discussion of ticketing, the majority 
of complaints are about ticket scalping. These are addressed to everyone in the chain of access 
fi-om venue employees to the acts themselves It must be said that Ticketmaster's reputation in this 
regard is much better than its predecessor, Ticketron, which Ticketmaster absorbed in 1990. 
Scalping per se is under investigation by the New York state attorney general and has received 
much scrutiny by the California state government as well It's a side issue here. 

Ticketmaster's absorption of Ticketron is of the essence, however Ticketron had a similar 
stranglehold on the off-site ticket market through the early '80s, and industry dissatisfaction led 
to the development of its rival. But fi-om the consumer point of view, Ticketmaster has resolved 
few of the problems Ticketron presented. Its ser^'ice charge per ticket, rather than per order, 
policy exacerbates them Competition can alleviate some of the problem In Portland, Oregon, one 



72 



of the few areas where Ticketmaster still feces a competitor, service charges are markedly lower 
But this industry's instinct is to avoid competition-and as I said, for some sound reasons Given 
this history, it is no longer reasonable to assume that the concert industry will self-regulate. 

Perhaps having a single ticket service operating across all forms of culture from sports to 
the opera even has some consumer advantage. If that's the case, then we should declare ticket 
services a form of utility, subject to oversight, if not full-scale regulation. 

I realize that this goes against the current trend in government. But we're dealing here not 
only with the entertainment industry but with what has become an important-perhaps the most 
important-facet of contemporary culture for millions of people. The most significant evil a 
ticketing monopoly creates is access to popular culture only for those who can pay very high 
premiums. This is folly, in the first place, because it's precisely the egalitarian nature of American 
pop music which has made it so powerfiilly attractive in the world market. And it is folly in the 
second place, because what may seem like mere amusement to any of you, may be what strikes 
someone else to the core of their soul. 

Rock music does this far more often than those not a part of its culture suspect by 
speaking clearly to and for people who may have no other public voice From Elvis to Bruce 
Springsteen. America's best popular musicians have interacted with and affected their audiences in 
exactly this fashion This tradition is carried on by Pearl Jam, who come here today not as litigants 
asking for dollars but as citizens asking for justice, and not even justice for themselves but justice 
for those less powerful than they are. If we're going to deal with these problems constructively, it 
ought to be in their spirit, which is the spirit of rock'n'roll. 



73 

Mr. CoNDlT. Thank you very much, Mr. Marsh. 
Our next witness is Mr. Rascoff. Mr. Rascoff is the managing di- 
rector of RZO Inc., New York, NY. Mr. Rascoff. 

STATEMENT OF JOE RASCOFF, MANAGING DIRECTOR, RZO 

INC., NEW YORK, NY 

Mr. Rascoff. First, Mr. Chairman, let me shghtly correct that. 
Although I have been squatting in New York working on a project 
that you will hear about for the better part of this past year, I am 
from Los Angeles. I have since 1975 been involved in the business 
affairs of the Rolling Stones. I am producing the recently an- 
nounced tour of the Rolling Stones, and have produced every tour 
of the Rolling Stones since 1975. 

First, I have no prepared statement which you may note, but I 
do want to say a few things to the committee and I appreciate the 
opportunity. The first thing I would like to say is clearly I have ab- 
solutely no quarrel with the idealism and the fervor of the position 
that Pearl Jam puts forth. I think in the context of the way Pearl 
Jam operates in the marketplace and the choices that they make 
in the marketplace, I think their sentiments are heartfelt. I am 
here for a slightly different reason, and that is to tell the commit- 
tee that as important as that position may be, it is not necessarily 
the way the entire industry operates. 

There is a segment of this industry manifested in the Rolling 
Stones as an example, which is my experience, which has slightly 
different experiences from Pearl Jam. It is not in any way to de- 
tract from tne merit of Pearl Jam's position. It is simply a position 
that comes from their view and their method of operating in this 
industry. The Rolling Stones operate in a slightly different method 
and a more broad-based method which I will explain to you. 

The simple fact of the matter is — let me clarify that for a mo- 
ment, the Rolling Stones have recently announced a tour it will 
take us the better part of a year to complete. We hope to go around 
the world, we hope to sell somewhere between 4 and 5 million tick- 
ets, and this will be a tour only of stadiums. We will not play thea- 
ters, we will not play clubs unless we drop in for some fun to play 
there, we will not play arenas, we are playing stadiums. Stadiums 
mean football stadiums, baseball stadiums, soccer stadiums. We 
have not announced too manv shows thus far. 

We have announced or rather put on sale nine tickets in North — 
sorry, nine markets have gone on sale thus far for this tour, which 
starts interestingly enough here in Washington on August 1. The 
first observation I would like to make is simply this: In the nine 
markets that we have gone on sale, five of those markets do not 
have exclusive ticket distribution arrangements with Ticketmaster. 

The fact of the matter is we are selling all those tickets, with 
some exceptions, where we are allocating some tickets to local tick- 
et companies, but for the most part we are choosing to deal with 
Ticketmaster. We are choosing to deal with Ticketmaster not be- 
cause we are forced to, but rather because that is our choice, and 
why is that our choice? It is our choice for one simple reason. It 
is absolutely impossible in the 1990's to route a tour of the mag- 
nitude of the Rolling Stones stadium tour without the most sophis- 
ticated distribution, ticketing distribution system available. If we 



74 

put one stadium show on sale, it is very important for us to know 
within hours, not days and not weeks, which was the case when 
I first entered this business, within hours how those ticket sales 
are going, did that show sell out, should we add a second stadium 
show, should we wait until next week? 

How can we route a tour without knowing that and know wheth- 
er we need to, for instance, hold the stadium in Detroit for next 
week or we risk losine it? We can't do that unless we know how 
many shows we can sell in New York the week before as an exam- 
ple. So instantaneous information is essential. Is Ticketmaster the 
sole repository of the infinite wisdom of instant information? I cer- 
tainly nope not. But the fact of the matter is they have a very so- 
phisticated system which enables us to achieve our very essential 
objectives. 

We look around at other alternatives, and none of them are satis- 
factory, and so we choose in those markets to deal with 
Ticketmaster. In those markets where we don't have a choice, I will 
address that in a moment. So the simple fact of the matter is that 
routing a tour of the magnitude of the Rolling Stones without a 
system as sophisticated as Ticketmaster's is like running an office 
without a fax machine and without a photocopying macnine. It is 
just not the way to efficiently run a business in the 1990's. 

The next point I would like to address, and then I will yield to 
my colleagues, is pricing in the marketplace, and I must say I com- 
mend my colleague on this panel, Bert Downs. He is obviously an 
excellent pedagogist. I commend him for his analysis which I think 
is very succinct, very complete, and probably quite accurate with 
one exception, and we can address that exception. It is true that 
most elements of a ticket price are determined by the marketplace, 
as Mr. Downs said. 

I would submit that ticket service charges are also determined 
by the marketplace, not by fiat, but it is a different marketplace. 
Mr. Marsh and Mr. Downs talk about the marketplace of the 
consumer, and that clearly is a very important marketplace in this 
business, but there is another marketplace. There is nobody, I 
think, wno is suggesting that Ticketmaster agreements are unilat- 
erally determined. 

We go into a building that Ticketmaster has an exclusive dis- 
tribution agreement with, and we learn that that is a freely nego- 
tiated, or I am told in any event a freely negotiated arm's length 
agreement with a limited term, and we are told the following: We 
are told that if you want to distribute tickets this is the charge 
that — this is the company that must impose a charge and distrib- 
ute the tickets. Why? 

Let's put aside the fact that I choose to work with them. Why? 
Because they have an exclusive agreement. Is that the only exclu- 
sive agreement that that venue has that I have to contend with? 
Of course not. When we go into a venue, I may say, I would like 
to use my own labor to build that stage, but I am told, I am sorry, 
there is an exclusive agreement with a particular union, you must 
deal with them. 

I might like to have my own family park cars in the parking lot, 
but I am told, I am sorry, there is an exclusive agreement with a 
parking lot concessionaire. I may want to sell my own T-shirts, but 



75 

I am told, I am sorry, there is an exclusive agreement with a vend- 
ing concessionaire and so forth, and all these exclusive agreements 
enter into the price. 

Let's not pretend that the ticket price is not devised to cover all 
costs plus a profit which, hopefully, people enjoy. So there are a lot 
of elements that go into a ticket price, and I think it is slightly in- 
accurate to place the total focus on the ticket service charge when 
it is one of many elements that go into the pricing of a ticket. 
Apart from making those limited observations, frankly, I have ab- 
solutely no quarrel with anything that has been said either on this 
panel or by the gentlemen from Pearl Jam. 

Mr. CONDIT. Mr. RascofF, thank you very much for that fine testi- 
mony. We appreciate your being here. 

Mr. CONDIT. Mr. Morris is the — something I know about now — 
is the manager of the Nitty-Gritty Dirt Band and we appreciate 
your being here very much. You are from Denver, CO, is that cor- 
rect? 

STATEMENT OF CHUCK MORRIS, MANAGER, NITTY GRITTY 
DIRT BAND AND OTHERS, DENVER, CO 

Mr. Morris. Yes, I am. I assume I was invited because my back- 
ground actually is quite varied. I was formerly a vice president of 
the Fay Concert Co., which is the largest concert promoting com- 
pany in the West, and in the last 10 years I have had a personal 
management company that includes country acts like Lyle Lovett 
and Suzy Boggus and rock acts like the alternative band, Big Head 
Todd, and the Monsters. 

The question of Ticketmaster's positive and negative impact on 
the music industry is much more involved than opponents and pro- 
ponents I think have suggested. The ticket industry itself is created 
by the absolute need for a centralized ticket company to replace the 
horrible previous method of promoters and bands sending tickets to 
a few stores to sell for shows. 

This old method was slow, inefficient. Some areas had no outlets. 
Tickets would run out in some stores while others had an excess. 
Long lines were in some places while no lines were at others and 
generally the whole system was a disaster. Tickets were lost, sto- 
len, and generally the whole process created ill will toward most 
of the promoters and the bands. 

As the live entertainment business exploded in the 1970's, new 
national computerized companies took the place of the old system 
and generally gave the public a great alternative to the slow cum- 
bersome tickets in a few stores approach. It opened up equal 
chances for the public to wait in line for the best seats and created 
for the first time tickets available on a national basis which should 
only help sell more tickets, especially for large events and music 
festivals. 

The negative eff'ect has been that Ticketmaster no longer has any 
competition and has gotten to the point where it has overcharged 
both the public and the bands for their services, I believe. This 
problem has been brought to the forefront by a whole new genera- 
tion of musicians, much more concerned than those in the 1970's 
and 1980's. Musicians of today are aware and concerned about the 
bottom line for both themselves and the public. 



76 

Many such as Pearl Jam and Garth Brooks, as well as lesser 
names, are very concerned about their fans not getting ripped off 
and getting a fair ticket value for their performance. The exorbi- 
tant Ticketmaster fee seems way out of whack with this philoso- 
phy. 

Toda/s yoimg musicians are very aware and sensitive about the 
product they are giving to the public and the value that should be 
assessed on it. A $4, $5 or $6 ticket charge added to an already 
high ticket price seems both repulsive and unfair to many of the 
young musicians of today. 

Pearl Jam's attempt to bring this problem to the forefront is ex- 
tremely admirable. I only disagree with one point, and that per- 
t£iins to the assertion that there is some kind of conspiracy between 
Ticketmaster and some major promoters as to a boycott of a pos- 
sible Pearl Jam tour. Being an expromoter and current manager, 
I have found in my 25 years in the business that no promoter in 
his right mind would pass on a chance to promote Pearl Jam this 
summer. Promoters are much too greedy to pass on the biggest act 
in America today no matter what the situation. 

Even if they aid, there are obviously other promoters within and 
outside the business willing to try it, if you take note of Michael 
Jackson and the owner of the New England Patriots tour about 10 
years ago. I think if Pearl Jam really wanted to tour, they are big 
enough to have created their own in-house ticket company, some- 
what like the Grateful Dead and found alternative buildings and 
promoters to do the dates. 

I understand what they were talking about when they said this 
was an amazingly tough job and certainly side with everything 
they said before about how difficult it is and I have somewhat 
learned a little today about what they would have to go through, 
but I don't think it is insurmountable. 

In summary, I think the solution to this complex problem should 
start with a couple of changes in the whole system. One especially 
is limited exclusivity between national ticket companies, buildings, 
and promoters. 

Two, make it illegal to charge a ticket fee on canceled or post- 
poned shows, which I believe is starting to happen these days, and 
three, limit the ridiculous ticket charge increases that have acceler- 
ated in the last 5 years. 

Thank you very much for inviting me to this. 

Mr. CONDIT. Thank you, Mr. Morris. If you have got time for 
some questions, we will try to get through them as quick as pos- 
sible. I would like to ask everyone on the panel, let's just go down 
the line and make it easy, maybe we will start with Mr. Downs. 

Is Ticketmaster a monopoly? Just give me a yes or no, and then 
I can 

Mr. Downs. In my opinion, Ticketmaster is an effective monop- 
oly, depending on how you define what the market is. If the market 
is entertainment tickets across the country, I would say, yes, they 
constitute a monopoly. 

Mr. CoNDlT. So your answer is, yes. 

Mr. Marsh. 

Mr. Marsh. With similar — I mean I think it is a complicated 
question about definitions, but I think in effect, yes. 



77 

Mr. CONDIT. Mr. Morris. 

Mr. Morris. I am not a lawyer, but it certainly appears that 
way. 

Mr. CONDIT. Mr. Collins. 

Mr. Collins. Absolutely in my world. 

Mr. CONDIT. Mr. Rascoff. 

Mr. Rascoff. As my experience indicates, the answer is no. 

Mr. CoNDiT. Can you tell me why you believe they are not? 

Mr. Rascoff. Well, as I said to you, we have nine markets on 
sale on what we hope to be the largest tour of the coming year, all 
stadium shows, and five of those markets we were free to use any 
ticket distribution method we were able to. 

Mr. CONDIT. I would like to ask, maybe I can get a colloquy going 
just for a few moments between Mr. Downs and Mr. Rascoff. You 
made the point to this chart, it appeared, Mr. Downs, when you 
made the presentation, the chart we have here, which is an excel- 
lent chart, we appreciate it, that the ticket distribution companies 
seem to be the only place where a monopoly may occur. 

Mr. Rascoff has pointed out that when you deal with the stadium 
and other things that you may have to take the caterer, you may 
have to take the parking. Do you have any comment on that? 

Mr. Downs. Yes, I do. First of all, I wish I could have drawn it 
this way for the benefit of the rest of the people. It is a little neater 
and cleaner, but that is the anatomy of a deal. I didn't know that 
5 out of 9 stadium shows that the Stones have just put on sale 
were not Ticketmaster. It certainly doesn't sound like the numbers 
I hear that at least have been dutifully reported. 

Maybe Ticketmaster really truly only has 30 percent of the mar- 
ket, but it certainly seems and feels like they have a whole lot 
more power than that in the cities I know about. 

I am equally impressed — I will return all the nice things you said 
about me — with Joe's presentation, and he does it without notes, 
which I really respect, but I call that the ''hot dog" argument, 
which is that you have to take the — Pearl Jam can't decide when 
they come to town they don't want to use a certain brand of hot 
dogs. There are a certain amount of things that come with the 
building, parking, there is certain labor agreements. But there are 
two aspects to this, Joe. 

To me, there is the exclusivity between the building and 
Ticketmaster, concessionaires, the facility merchandisers, the peo- 
ple who actually sell the shirts, the parking people. You can't put 
your family in charge of that, I agree, but I think where the rub 
really comes in and I am glad you asked me to respond, is that 
there is effectively in a lot of our experience only one of the big 
ticketing, national ticketing companies, and that is the real rub. 

I think if we only had one hot dog company, the hot dogs would 
cost a lot more. It is not the exclusive deal with the hot dog com- 
pany on a market-by-market basis. It is the overall effect on a na- 
tional level of ticket prices. 

Mr. Rascoff. I absolutely agree there is only one effective com- 
pany distributing tickets, but the question is why is that? I think 
that is because they came up with a mousetrap that no one has 
managed to better at an alternative price. It is not because by fiat 
someone decreed that they shall be the ticket distributor. 



78 

Mr. Downs. I think we can thank the previous administration 
for that, but we can't go back to that. We are now 1994. I know 
there were similar arguments made about AT&T a few years ago. 
I don't know if you all noticed, but the fact that AT&T has competi- 
tion now, the operators are a lot more friendly. The fact that there 
is competition, even though AT&T was great, it is better now. 

Mr. Rascoff. Don't misunderstand what I am saving, if you were 
to ask me, would I like to see a competitor to Ticketmaster, abso- 
lutely, absolutely. 

Mr. Downs. Good. 

Mr. Rascoff. The question is, though, why are they the domi- 
nant factor in the marketplace? The fact of the matter is they are 
the dominant factor in the marketplace because they are good at 
what they do and in tours that I do, we need that service. That is 
my only point. 

Mr. CONDIT. I am sorry, I appreciate you guys doing that for us 
in responding to this question. 

Mr, Marsh, Mr. Morris, Mr. Collins, do you want to add anything 
to that? 

Mr. Marsh. I just wanted to say you know from the consumer 
point of view, there is not a choice in most major venues. It may 
be that when you get to stadiums, you deal with a different situa- 
tion. It may be that when Mr. Rascoff puts on the next Rolling 
Stones show, it will be 9 out of 9 Ticketmasters. We don't know 
that. 

What we do know is from the consumer's point of view, there is 
no choice. There used to be choice. Things were different. Prices 
were lower. The Justice Department, from that point of view, may 
have made a mistake. 

Mr. CONDIT. I wanted to ask you to respond to— it has been said 
several times — I concede we have done research in Ticketmaster. 
They are very, very good at what they do. They seem to be profes- 
sional, state-of-the-art. There is some argument, belief they are 
good and they have the biggest share of the market because they 
are good. Other people who have been in the market failed. They 
financially could not continue to go. 

Mr. Marsh. We do not know what would have happened if 
Ticketron had been forced to find another buyer. 

Mr. CONDIT. OK. 

Mr. Rascoff. That is an interesting question. I don't know the 
answer to that one. I can tell you that empirically in 1989, we put 
tickets on sale at some shows where we had a parallel ticketing 
distribution system. For a particular show, we had Ticketron sell- 
ing. The simple fact of the matter is the service and the job done 
by Ticketmaster vastly overwhelmed the job Ticketron did. I think 
Ticketron failed because they did a lousy job. Not because 
Ticketmaster bought them. 

Mr. Marsh. The issue isn't why Ticketron failed. The issue is 
whether Ticketmaster should have been allowed to buy up its com- 
petition and what the consequences of Ticketmaster having made 
that purchase are. Not only in the industry, but to consumers. 

Mr. CONDIT. Ticketmaster — they were given the right and au- 
thority to merge with Ticketron. There was nothing illegal in that 
act. Do we agree with that? 



79 

Mr. Marsh. Isn't part of the issue whether or not that was a mis- 
take? When the Justice Department has made such a decision, is 
there no recourse? 

Mr. CoNDiT. You have the right to make that as a point. I believe 
that is what Pearl Jam is doing. We hear Ticketmaster is entering 
into long-term exclusive contracts with stadiums and concert pro- 
moters. Is that standard practice? 

Mr. Morris. Yes, it is. As far as I know. 

Mr. CoNDiT. Anyone else want to respond? Is that standard prac- 
tice? Pearl Jam considers this a kickback in their brief with the 
Justice Department. Do you agree? 

Mr. Downs. I don't know the legal definition of a kickback. I 
think an undisclosed rebate, I think, is characterized not as a term 
of art in the legal sense but sort of a popular — Mr. Horn asked do 
you consider your advance from the record company a kickback. I 
never thought in those terms. I think there is probably a way to 
construe a record company advance as a kickback. It became al- 
most meaningless at that point. 

Mr. Collins. I would like to comment that Aerosmith has been 
touring in America for over 20 years. When these long-term deals 
and rebates to promoters and venues started coming, we started 
hearing rumors of this happening, we asked a lot of our promoter 
colleagues we had been doing business with for many years if, in 
fact, they were receiving these and could we, you know, be privy 
to the agreements. 

To this date, you know, people have until very recently, until 
this — all this publicity started, people have been denjang, in mv ex- 
perience, denying that. Not many are admitting to this. Is it a kick- 
back? Whv was it being hid firom the artists, from my artists in 
particular/ I can only testify to my experience. 

Mr. CoNDiT. Mr. Rascoff, do you have any comment to that? 

Mr. Rascoff. No. 

Mr. CoNDiT. For Mr. Morris, you represent, I understand, several 
new popular performers. Is it your opinion, based on Mr. Collins' 
testimony, the new bands are being penalized by Ticketmaster? 

Mr. Morris. I don't know if "penalized" is the right word. Obvi- 
ously, as has been spoken before, this is one of the key parts of our 
business where there is no other competition. When like a big— one 
of my bands comes in and played Red Rocks Amphitheater 3 years 
ago, we have no choice but to use Ticketmaster. 

We have no choice but to pay a certain amount, which I believe 
is 4 percent of the ticket sales that will be coming at the expense 
of the show. We have no choice to do anything. When we want to 
hire sound and lights that ni^t, we have a choice to go to five or 
six different companies to get the best sound and best price. We 
have a lot of other choices. We don't have it in this field. I think 
that is the crux of this whole problem. Choices. 

Mr. CONDIT. Does this mean that Ticketmaster, because of their 
surcharge penalty, is sort of deciding who goes on tour and who 
doesn't? 

Mr. Morris. No. I don't think that is the case. I think there are 
some bands that really want to stand up for certain things like 
Pearl Jam that are refiising to partake. We have a right to go in 
there or not go in there. We don't have a choice of what ticket com- 



80 

pany to use in certain buildings, with certain promoters, in certain 
cities. 

Mr. CONDIT, OK. I am going to defer to my colleague to my right, 
Mr. Horn. Then we will come back to Mr. Owens. 

Mr. Horn. Mr. Chairman, it seems to me we are into an eco- 
nomic model here in relation to the concert industry, however de- 
fined. Do you see yourself when you are setting up a venue in, let's 
say, Los Angeles or Long Beach or Atlanta that you are into a re- 
gional market, a local market for that concert or a national mar- 
ket? What are we talking about? 

Mr. Downs. Talking about a tour? A national market. The over- 
all tour, 50 dates. If you are talking about an individual show, you 
are probably talking about certainly a local market, somewhat of 
a regional market. If you are the Grateful Dead, a national or 
international market because people travel. 

Mr. Horn. I think you did an excellent job, several of you, on the 
interrelationship especially on the Rolling Stones tour. You need to 
know to make certain additional arrangements about how that 
group is doing. But when Ticketron was around, did they not have 
an exclusive monopoly in a particular arena or was Ticketron and 
Ticketmaster competing within the same arena? Didn't you still 
deal with a monopoly? 

Mr. Rascoff. I am not going to engage in what a monopoly is. 
I am not an attorney. I cannot answer that. If the question is be- 
fore the advent of Ticketmaster, did we go into a building and we 
were told by the building you must distribute tickets through 
Ticketron, absolutely. Absolutely. 

Mr. Horn. Right. 

Mr. Rascoff. That was the point I made earlier. I think 
Ticketmaster emerged because they devised a better mousetrap 
and convinced buildings they are a more appropriate party to sell 
tickets than the competition. 

Mr. Marsh. During that period it was very common because the 
industry has grown exponentially each decade. During the period 
when Ticketron first developed, it was much more common to do 
tickets by straight mail order, send them to a P.O. box or sell them 
at the box office or in certain other record store kinds of distribu- 
tion that Mr. Downs was talking about. 

It was a different, you know, the highly electronic nature of our 
society hadn't yet evolved. It wouldn't have taken it nearly so much 
for granted if the majority of your tickets would be sold like that. 

Mr. Horn. Mr. Marsh, would you like to go back to that period? 

Mr. Marsh. Would I like to go back to that period? 

Mr. Horn. Right. 

Mr. Marsh. No, I see no reason to stand still or go back. I want 
to go forward. 

Mr. Horn. You want to regulate it as a utility? 

Mr. Marsh. That is one concept. Another would be to have it dis- 
gorge some of what it has absorbed and go back to a more localized 
group of things which has been done through congressional action 
in the past. For instance, in the oil industry, and as someone point- 
ed out, in the telephone industry, the airline industry. All of those 
industries that have been deregulated. 



81 

And in some cases that led to the breakup of certain corpora- 
tions. 

Mr. Horn. What you have here, as I look at mv own local arena, 
you have a city government that gets a i>ercent of the g^oss of oper- 
ations in the arena. They have a vested interest in getting, in deal- 
ing with a management that can fill the house. Tnat is the way 
they are looking at it. Because if they do not fill the house, they 
do not get their percent of the gross. In tight municipal budgets, 
that means you have less police services, less fire services, so lorth 
and so on. 

So in a sense, isn't that the driving force to get simplified man- 
agement, assure you have the most efficient management, monop- 
oly or nonmonopoly; at least in your little world of that arena for 
which you are responsible? 

Mr. Marsh. That is one model. The other model is that culture 
is itself a service. I think that one of the things that is going on 
here is there is an industry dispute about what Ticketmaster's 
prices are and what the right way to regulate this is within the 
business community. 

There is another dispute, as I try to point out, which Pearl Jam 
has become the standard bearer for and because they are part of 
the industry it is confusing. Because I stand in a strange relation- 
ship to it, too, because I basically have reported on this aspect of 
the world my whole career. But me fact is that there are overlap- 
ping interests here. 

There is an interest of the business community and what you 
said is entirely accurate. From the interest of the cultural commu- 
nity or the citizens at large, that arena may not exist simply to pay 
bills. It may exist to make sure that the citizens of Long Beach or 
wherever have access to culture. 

Mr. Horn. Let me say 

Mr. Marsh. That is a valid purpose, too. 

Mr. Horn. Let me say what the citizens of Long Beach feel about 
our arena, they resent outside gproups coming in, taking all the 
dates so the revenue can pour into the city treasury, the promoter's 
treasury, whatever and they wonder why they can't get more of the 
dates for Civic Light Opera, Long Beach Light Opera, symphony, 
et cetera. 

Why can't we get more provisions out of the arena? It doesn't 
matter if you come or not in terms of the average citizen. They 
would like to know why can't I see my local performing groups. 
They can't because the management, whether it be a high end sub- 
sidiary or whatever and all the little submanagements say, hey, the 
city wants us to fill this place; and the way we fill it is to get na- 
tionally known stars, which brings in an audience way beyond the 
boundaries of Long Beach. 

Mr. Marsh. Having attended concerts at the Long Beach Civic 
Arena, one of the things I point out to you is fi-om the point of view 
of a rock fan that lives in Long Beach is one of the things you can 
say is the concert industry I tried to describe the history of has ex- 
isted for 25, 30 years. In this entire country of the tens, hundreds 
of millions of dollars that have been taken out by promoters who 
are in essence Mr. Rosen's and Ticketmaster's business partners, 
not one nickel of that money has been built to create a — ^nas been 



82 

spent to create a purpose-built indoor rock concert facility in this 
country. No such thing exists. There has never been that kind of 
feedback to the interests of their own consumers. 

Mr. Horn. Let me ask general questions. Just say yes or no, as 
Mr. Condit suggested. 

I take it with those of you in concert management, and have 
done or are doing that, you have done deals with Ticketmaster? 
Are there any of you that have not? None? 

Mr. Downs. We are not in concert management. Most of us up 
here are in personal management. We are not promoters. We do 
not manage concerts. We manage attractions. We are on the other 
side of the equation, with the artists. We do not do tickets with 
Ticketmaster. Look at the chart. They deal with the promoter. We 
represent the artist. 

Mr. Horn. When Rolling Stone goes to our area, you have a local 
promoter worrying about that? 

Mr. Rascoff. I worry about it because it involves money and 
ticket prices. I worry about it a lot. Yes, there is a promoter who 
contracts with the building who in turn contracts with 
Ticketmaster. The promoter may be a national promoter as op- 
posed to local, but that is the chain. 

Mr. Horn. Am I to understand in every case none of you person- 
ally then have had to deal with Ticketmaster or have you? 

Mr. Rascoff. Deal on a contractual level? 

Mr. Horn. Yes. 

Mr. Rascoff. I have not. 

Mr. Marsh. I have not. 

Mr. Downs. I have not. 

Mr. Horn. None of you have? Is that correct? 

Mr. Downs. Because of our role in the industry; that is correct. 

Mr. Horn. I want to get straight where we are coming from on 
this. 

So has Ticketmaster ever threatened to sue any of you? 

Mr. Downs. Not yet. 

Mr. Horn. The basic question we mentioned parking. Mr. Rascoff 
went through a litany of the other things that are there as an ex- 
clusive agent, the people that build the sets that has upset the 
local people when they try to get in there and have to pay very 
high prices. You just add it to the ticket, a very popular group if 
you are on tour. Do you think Ticketmaster is entitled to be paid 
for the service it provides? I take it the argument is over the de- 
gree to which you feel they are getting money because of their ex- 
clusive monopoly in a particular local setting? 

The fact that in your judgment if vou are on a national tour, 
from your standpoint, you think they have too many local settings 
which, as I listened to your testimony, that would make them a 
monopoly in major markets as far as you are concerned? Is that a 
fair statement of what you are feeling? Do you feel something dif- 
ferent? 

Mr. Marsh. Well, isn't — I just look at it this way: what is to pre- 
vent — let's say Pearl Jam wants to go out and have $18 tickets. 
There is nothing, as I understand it, if they decided to work 
through Ticketmaster's system to prevent them from saying you 
can play for $18 a ticket. Your service charge is another $18. We 



83 

have tx) amortize our expenses in working with the Justice Depart- 
ment on what you did. We will take it out by charging an $18 serv- 
ice charge. There is nothing to prevent that. 

Mr. Horn. Reality is they don't do it. 

Mr. Marsh. Reality is we don't know what they are going to do. 

Mr. Rascoff. I think there is something to prevent that, Dave. 

Mr. Marsh. What is it? 

Mr. Rascoff. I don't know who is in this room at the moment. 
If Ticketmaster charged $18 on an $18 ticket there are people who 
would say let's get together and go into the ticketing business. 

Mr. Marsh. You wouldn't be able to do it. 

Mr. Downs. How about — ^how would we be able to do it in terms 
of the Omni? Some of us want to get into the ticket industry. I 
don't personally. I would just as soon leave it to somebody who is 
good at it. Would-be entrants into the field, that is the problem 
with a monopoly. There are barriers to those entrants. Those bar- 
riers include the long-term contracts. 

Mr. Marsh. There was a merger in the recording industry about 
14 years ago that was declined by the Justice Department on ex- 
actly this basis. The recording companies of Warner Communica- 
tions which is now Time-Warner and Polygram, the Dutch-German 
company wanted to merge. CBS Records, now Sony, protested say- 
ing that this would create an anticompetitive situation. 

One of the things the Justice Department said in ruling that this 
merger could not go forward was that it — to create the kind of dis- 
tribution system that would be eliminated would cost $2 to $3 bil- 
lion. That was a ground for declining the merger. Interestingly 
enough, that was during the Reagan administration. 

Mr. Horn. You rapidly get through three others that relate to 
Ticketmaster. The next round we can finish up. 

I take it from the testimony that Ticketmaster helps in planning 
national tours because of the rapid data return? Now, my query to 
you is does Ticketmaster help in your accounting and settlements 
for a particular venue to make sure that you get the revenue you 
feel due to you? 

Does it help or doesn't it? 

Mr. Rascoff. My experience is rather neutral in that area. We 
do not look to them. 

Mr. Horn. As a promoter? 

Mr. Rascoff. Yes. 

Mr. Horn. Somebody has to account for those tickets. Supposedly 
Ticketmaster dues to the promoter; is that the way it works? 

Mr. Rascoff. Yes. Or the building. 

Mr. Horn. The building. You can go in and out on it if you think 
your promoter has done you in; is that correct? 

Mr. Rascoff. Of course. 

Mr. Horn. So is it a useful service? In your accounting in your 
settlement, how much did we take in for this area? 

Mr. Morris. My opinion absolutely is a necessary and useful 
service. They have been very, very good at that, actually, as far as 
handling of the money, accounting for the money, showing how 
many tickets were sold when, how, all of the — they have been very 
good at that. 



84 

Mr. Horn. Hnve they ever not paid you the money or your pro- 
moters that is in the contract? Have they ever not paid the money 
that was due? 

Mr. Morris. I was a vice president of a promoting company for 
10 years, although I left before Ticketmaster really blossomed. No, 
we never had any problem getting paid. 

Mr. Horn. Have they ever paid earlier than the concert? Given 
you, in a sense, advance income prior to the date, full billing by 
your g^oup? 

Mr. Morris. They never paid the groups earlier. As far as I 
know, I think that is also in most areas, in most States, you cannot 
do that. I could be wrong about that. 

Mr. Horn. Have your promoters ever had any say in the parking 
prices of the building or the concession stands in the building, to 
your knowledge? 

Can you negotiate that? Have you ever negotiated that? 

Mr. Morris. I think a promoter, especially a major promoter in 
a city that does a lot of shows, has a lot of say with buildings and 
certain aspects of pricing, but again it depends on the city and the 
promoter and on all sorts of things like competition. 

Mr. Downs. I think the answer to whether a band through its 
representatives can influence a promoter and building into what 
the concessionaires, the facility merchandisers will charge, the an- 
swer is yes there may be limits. Some may start off charging 40 
percent who are willing to come down to 30 percent on a scaled 
basis. Bands, I know — as has been reported. Pearl Jam did this 
thing, are able to influence the downward movement of facility 
merchandising charges. 

Mr. Horn. Mr. Downs, I found your testimony very interesting. 
You mentioned TickExpress and SEATS. Are they still in business? 

Mr. Downs. TickExpress went out of business. SEATS was ac- 
quired by Ticketmaster. That is my point. They are not still in 
business. We no longer have the choice. When we play Atlanta next 
time, unless something changes, we will be dealing with whatever 
promoter we use in Atlanta. There is no other game in town. 

Mr. Horn. As I said earlier, one of the things that worries me 
when I go through any ticket computer system is that I am not get- 
ting the best seats. Those promoters are holding out the good seats. 

Maybe if I went to the box office, they have better seats, et 
cetera. Is it feasible in this day of computers to allow a multiple 
ticket distribution system in your judgment; and is that what you 
would prefer to get competition into the marketplace? What is the 
reaction? 

Mr. Rascoff. The competition I think would not be in the sale 
of a particular show. I mean from my experience, it would probably 
be rather inefficient to have two ticket distribution companies sell- 
ing tickets to the same show. 

Where the competition might be very helpful and interesting is 
if we — there were a competitor to Ticketmaster with whom a build- 
ing could negotiate for the best arrangement to sell the tickets for 
their shows. But that is where the competition would come in for 
the privilege of getting the contract for the right to sell the tickets. 



85 

Mr. Horn. Very good. Now Mr. Marsh, as a rock and roll journal- 
ist, you advocated the price regulation of concert tickets much like 
the utilities we mentioned. 

Mr. Marsh. No, I haven't. 

Mr. Horn. You haven't? 

Mr. Marsh. No, I didn't say anything about price regulation. I 
said Ticketmaster and its service charges ought to be subject to ei- 
ther oversight or regulation. 

Mr. Horn. In essence, a public utility to me is the telephone 
company or the gas company. It has a monopoly. There is a State 
agency that says is this a reasonable profit arter your service is 
covered. I assume that is what you are talking about. 

Mr. Marsh. Right. I was talking about Ticketmaster, not 

Mr. Horn. I am talking about the price regulation of concert 
tickets which you would have to do if you set the profits of that 
particular monopoly. 

Mr. Marsh. I don't understand that, sir. 

Mr. Horn. All the phone company is doing is passing on the 
charges to those of us who use the telephone. If you have a State 
regulation system and thej^ say $1, $2, $3 is a fair price for that 
service, thev are simply going to pass it on to whatever the ticket 
is. You might work out a volume discount or a one purchaser who 
buys seven discoimt. 

Mr. Marsh. There is a difference between deciding that the New 
York Yankees, to use a sports example, are going to charge $8 for 
a box seat and deciding that — and regulating that; and regulating 
the service charge whether that should be 50 cents or another $8. 
I am not talking about regelating the ticket price. You may be. I 
am happy to answer questions about that. 

Mr. Horn. Can they avoid that now or can they if they go di- 
rectly to the box office? 

Mr. Marsh. In many cases — last summer, my — I had a daughter 
who died of cancer. We did a benefit last summer at Madison 
Square Garden, Bruce Springsteen was the headline attraction. 
Ticketmaster was the only vendor at that event that refused to ne- 
gotiate a lower price. Madison Square Garden gave us a lower 
price. The booking agency worked free. The artist obviously worked 
for free. Merchandisers — which is a rare thing — worked for almost 
nothing, et cetera. We got major, major concessions from every con- 
cessionaire but Ticketmaster. 

They wanted to sell the tickets — just a moment. We wanted to 
sell the tickets at the Madison Square Garden box office and we 
were told that we could not. Their Ticketmaster contract prevented 
it. So the answer I am afraid is — in my experience is no. 

Mr. Horn. I am interested in vour experience. To all of you, that 
simply I would say is it true ana is it your feeling listening to your 
promoters as they deal with venues around the coimtry that per- 
haps 80 percent of the tickets are bought by the fans at the box 
office, not through a computerized system, whether it be 
Ticketmaster or Schubert, whoever? What is the feeling on that? 

Mr. Rascoff. That is not the case with the Rolling Stones. In the 
case of the Rolling Stones, almost all tickets are distributed 
through the computerized ticketing system at outlets or by tele- 
phone. 



86 

Mr. Downs. When U-2 played Atlanta last year, they played a 
16,000 seat arena before they came back and played the stadium. 
If Pearl Jam is the biggest band in the world, U-2 is up there with 
them. When they played, there was a volume of 2 million phone 
calls placed to buy 16,000 tickets. It blew the phone system out. 

There aren't a lot of tickets to go buy at the box office when you 
walk up there at the show. That is the dynamics of the industry. 
It happens quickly. The show sold out in something like 16, 17 
minutes once they got the phone system going. The box office thing 
is sort of a red herring. It is really not that much at issue. 

Mr. Horn. One last question. Does Ticketmaster help reduce 
scalping? 

A lot of fans are concerned they can't find all the sweet deals 
that are given by the local promoter, hoarding the tickets on very 
popular concerts up in the attic. Presumably, if you go through a 
set ticketing system, you would think and you would limit it to so 
many or whatever it is per tickets per person. You would put some 
limit on scalping. Do you feel that that is a relevant factor? 

Does that concern you, the scalping of tickets? 

Mr. Marsh. As I said in my testimony, experience shows 
Ticketmaster as opposed to Ticketron — and again I don't want to 
go back, I would like to go forward — ^Ticketron was — had a bad 
problem in that area, was well known among fans and well known 
in the industry. 

One of the reasons why certain people advocated Ticketmaster 
early on was precisely because they do have a much, much better 
record in that area than their predecessor. 

Mr. Horn. Any feelings? 

Mr. Collins. In my experience, Ticketmaster has not helped 
with scalping. I am not accusing Ticketmaster of scalping, but I can 
only relate my experience. At a show at the Los Angeles Forum 
last year, I personally, at the request of my band, went out and 
interviewed with three members of my staff the entire fi*ont section 
of the floor. I found that every single person I interviewed had pur- 
chased their tickets from a scalper. In Philadelphia 

Mr. Horn. Did they tell you what particular scalper? Did you 
find out how he or she got the tickets? 

Mr. Collins. We have a list of those. We did not find out how 
they got the tickets. 

Mr. Horn. Kids in line? How did they get them? 

Mr. Collins. I don't have the answer to that question, Mr. Horn. 

Mr. Horn. You don't know Ticketmaster did it? 

Mr. Collins. As I said, I am not accusing Ticketmaster. In my 
experience, scalping has gotten to epidemic proportions. 
Ticketmaster has not helped with this. 

Mr. Horn. Any other comments? 

Mr. Rascoff. I think the methodology by which Ticketmaster 
sells tickets probably does help. I am not suggesting there is an 
overt aid to eliminating scalping. That is not my point. The 
Ticketmaster system is a "best ticket available" system. 

If you have 50 outlets selling tickets, if you walk into any one 
of those outlets at the same moment, you will get the next best 
available ticket on the system. So in theory, consumers who de- 
spair of getting the best available ticket would, I think, turn to a 



87 

scalper more readily than they might if they were able to know 
that no matter where thev went, which outlet, they would get the 
best available ticket. In tneory, I think the system should help in 
the scalping problem, but I don't think that that is necessarily any- 
thing unique to Ticketmaster. It is unique to the Ticketmaster sys- 
tem. 

Mr. Horn. Thank you, Mr. Chairman. 

Mr. CONDIT. Mr. Owens of New York. 

[The prepared statement of Mr. Owens follows:] 



88 



STATEMENT OF CONGRESSMAN MAJOR R. OWENS 

BEFORE THE INFORMATION, JUSTI CE, TR ANSPORTATION 

AND AGRICULTURE SUBCOMMITTEE ON THE 

TICKET DISTRIBUTION INDUSTRY 

June 29, 1994 



I want to thank Chairman Condit for having a hearing that is bound to have a profound 
impact on every consumer in this nation. Each and every one of us here today has bought 
tickets for an entertainment event, and thought the tickets were overpriced, but did not know 
why. Now, I guess we have our answer. There is only one national agency controlling all 
ticket prices. The consumer, and :^>parently the entertainers, have only one option. 
Hcketmaster or bust 

As the only Librarian in Congress, I am a strong advocate of the public's right to know 
the truth. As I understand it, hardly any consumers are aware of how much money diey pay 
the ticketing agency just to process the ticket because the majority of tickets are purchased over 
the phone by credit card. In fact, I am anxious to find out from the Ticketmaster rqpresentative 
exactly what the ticketing charge covers, since Ticketmaster charges the same fee if you 
purchase the ticket over Ae phone or in person. 



89 



Peail Jam brief filed with the Dqaitment of Justice raises the even more serious question 
of whether Tlcketmaster is unfdily using its power to ensure that entertainers accqit dieir prices. 
As we have found in other industries where one large conglomerate has contrdled prices — the 
telecommunications industry, for exanq>]e — Federal regulations to ensure competition and 
consumer choice are necessary. I hope this hearing will shed more light on the steps that we 
as members of Congress can take to protect our constituents and ensure they are getting what 
they pay for. 



90 

Mr. Owens. Mr. Chairman, I will try not to be redundant. Many 
of the questions I have have already been asked. I learned a lot 
about the business. I think most of you seem to agree with the law- 
suit brought by Pearl Jam. Would you say you represent the major- 
ity of the people in the industry, artists, promoters? Is that general 
agreement that you want to move in that direction? 

Mr. Downs. I have a hard time conveying the depth of feeling 
within the industry that Pearl Jam has unleashed. I think that the 
mail that you all will be getting soon, the interviews the Justice 
Department does will bear this out. There have been a lot of people 
for a long time wishing that someone would fight this battle. 

A troubadour friend of mine last week in Los Angeles told me 
they thought the appropriate thing would be to build statues of 
Pearl Jam. There is a lot of admiration for what they are doing. 
I don't think you will find very many people in the artistic end, 
which is what those of us up here represent, who are happy com- 
pletely with the lack of competition in the industry. 

Mr. Owens. They focused on Ticketmaster, there are no other 
problems the artists have with the other 

Mr. Downs. Artists have lots of problems, sure. 

Mr. Owens. Unhappy with Ticketmaster only, promoters? 

Mr. Downs. They are 

Mr. Owens. A lot of people on your chart get a piece of the ac- 
tion. 

Mr. Downs. Most are unhappy with attorneys and managers, 
too. I think the system by which — of that chart there, where every- 
thing is in a competitive relationship, when they are unhappy with 
somebody, they can go down the street and find somebody else. 
Where that breaks down is at a critical part and something impor- 
tant to artists, which is the price of the ticket, the service charge 
portion of the ticket which is controlled really in most of our expe- 
rience by a single provider. 

Mr. Owens. You also mentioned several times that you wanted 
something similar to what happened with the telephone industry 
being broken up, the oil industry, antimonopoly action by the Jus- 
tice Department. 

Why do you think there are no competitors in this situation? The 
amounts of money necessary to capitalize in these other industries 
are tremendous. Oil and telecommunications, those are billions of 
dollars we are talking about. 

What kind of money are we talking about in a situation like com- 
petitive for Ticketmaster? What kind of capitalization are we talk- 
ing about? What kind of overall g^ross does Ticketmaster realize? 
How do you make the comparison with oil or telecommunications? 

Mr. Downs. I don't think the ticketing industry is as big as the 
telephone industry or the oil industry. I cannot sit here and tell 
you I am an expert. I couldn't tell you how it would be done. I also 
don't think we can go back and undo 1991. To move back in time, 
that is not the idea. 

There are people at the Justice Department both on the legal and 
economics level asking those questions. It may be at the end of the 
day after you guys did your hearing and Justice has done its inves- 
tigation that the system that is here, it may not be perfect, may 
not be optimal, but as Mr. Rascoff says, it may be the best possible 



91 

system available. I think most of us don't think that is the case 
that may be the conclusion. 

Mr. Owens. Does anybody have an idea what Ticketmaster 
grossed last year? 

Mr. Marsh. Mr. Horn had the numbers earlier this morning. If 
I remember right, it was in the $700 million area a year; $172 mil- 
lion. 

Mr. Owens. Gross is $172 million? 

Mr. Marsh. That is the number read out this morning. No. 

Mr. CoNDiT. Mr. Marsh, the numbers I have, Mr. Horn said 
$172. 

Mr. Marsh. The net was seven. 

Mr. CONDIT. Seven point five as indicated on these notes. 

Mr. Owens. That was the profit? 

Mr. Condit. You can define that as Ticketmaster can certainly 
clarify. 

Mr. Owens. Do you think there is some kind of illegal activity 
here in terms of intimidation or criminal activity that allows them 
to maintain a monopoly on the places where the performers per- 
form? Is there something that they have that s^ves them the edge 
on their competitors? Any one of you? You donX think there is any 
illegal activity of a criminal nature? Any kind of intimidation? 

Mr. Condit. Can we get a nod? 

Mr. Rascoff. I think the answer to that is no, from my stand- 
point. 

Mr. Marsh. Or at least we don't know. 

Mr. Owens. We are all talking about high-tech advantages they 
have of being there first. 

Mr. Downs. By being the only 

Mr. Marsh, lliey are not the first. Ticketron was the first. The 
advantage they have is that in 1991 they were allowed to buy their 
only meaningful competitor. 

Mr. Downs. It has been hit on how did they get so big. It is a 
complex question. There are two components. One, they are very 
good at what they do. There is no doubt about it. They are good 
at computerized distribution of tickets on a national level for con- 
certs. You can get information instantaneously. 

The other thing is they were able to acquire all of their — ^most 
of their significant competition, and it has been said that they built 
a better mousetrap. A more apt metaphor is that they invented a 
better padlock. 

Mr. Condit. Thank you, Mr. Owens. 

Ms. Woolsey from California? 

Ms. Woolsey. Mr. Chairman, I wasn't here for most of the testi- 
mony, so I will wait until the next set of questioning. Thank you 
very much. I think most questions have been asked and answered. 

Mr. Condit. Thank you. 

You have been a very impressive panel. We appreciate your time 
very much. There may be additional questions submitted to you. I 
hope it is OK if we can expect a response in writing. Thank you 
very much. 

Mr. Marsh. Thank you. 

Mr. Condit. Panel three. 

Please rise and raise your right hands. 



92 

[Witnesses sworn.] 

Mr. CONDIT. Let the record indicate they answered in the affirm- 
ative. 

I know you both have been here for the entire hearing and you 
have had the patience to listen to all of this, Mr. Rosen. I appre- 
ciate that very much. You have been kind to share information 
with the committee. I appreciate that very much. You have what- 
ever time you need, understanding we do have time limitations. 
Try to tell your story. If we run into problems, we will let you 
know. 

Mr. Rosen is the chief executive officer of Ticketmaster, Los An- 
geles. 

STATEMENT OF FRED ROSEN, CHIEF EXECUTIVE OFFICER, 

TICKETMASTER 

Mr. Rosen. First of all, Mr. Chairman, I would like to thank you 
for the opportunity to speak. I think what I will do rather than 
read my statement, which you have been given, is deal with some 
of the questions that you may want to ask me. I think it would be 
most informative to answer your questions and address some of the 
issues that have arisen here this morning. I think that might be 
most helpful in the time that I have. 

To begin with, we support what Pearl Jam is trying to accom- 
plish, keeping tickets inexpensive. We have no issue with that. We 
do not set ticket prices. I keep reading stories that we are respon- 
sible for the price of all tickets in America. We have nothing to do 
with the pricing of tickets. The acts determine their own price. 
Teams determine their own price. Family attractions determine 
their own price. We have nothing to do with that. 

While we applaud their efforts, it should be pointed out that in 
connection with this particular matter, various promoters spoke to 
the group — we had no direct contact with them — and told them we 
would compromise on this matter. We agreed to lower our service 
charge to $2.25 or $2.50, depending upon the area. 

The fact is that if Pearl Jam had been willing to "compromise" — 
something that this great institution of Congress is built upon — 
this problem might not have risen to this level today. 

But, as is clear from both the band's statements today and the 
memorandum they submitted to the Justice Department, they said 
"this is it, take it or leave it." This unwillingness to compromise 
caused some of the problem. 

Let me address some of the comments that have been made 
today, some of which I find remarkable. Dave Marsh criticized 
Ticketmaster for collecting parking fees. It is true that we collect 
parking fees. But we do not collect them for ourselves. We collect 
them for the building. Ticketmaster is an agent for the building 
and acts on its behalf, collecting fees as it determines, like parking 
fees. 

We provide a computerized inventory control system for build- 
ings. While most of this discussion has focused on offsite ticketing, 
you must imderstand that we provide various other functions for 
buildings: season ticketing, group ticketing, various accounting 
functions, providing arenas, venues, and teams with computer 



93 

equipment, and so on. So we do much more than just provide off- 
site ticketing. 

Congressman Conyers mentioned earlier that he did not under- 
stand why Ticketmaster would have a service charge at a building's 
box office. I didn't understand that either, so I had someone call 
the building and find out what charge Congressman Conyers was 
discussing. It turns out that the building has a facility charge. This 
is part of the confusion of charges often attributed to us that are 
collected on someone else's behalf Facility charges belong to the 
buildings, not to Ticketmaster, 

The service charges belongs to us. Facility charges, parking 
charges, and other charges that buildings might add onto the ticket 
price belong to the buildings and we, as their agent, collect those 
charges for them. 

There are a number of issues that I want to address concerning 
Ticketron. In the prepared statement which we have given to all 
of you, there are affidavits that Ticketron filed in 1991 with the 
Justice Department in support of our purchasing certain assets of 
their company. What those affidavits show is as follows: Ticketron 
had lost $2 million in 1988, $2 million in 1989, $7.5 million in 
1990, and were projecting a loss of $8.5 million in 1991. The fact 
of the matter is that in 1991 Ticketron was not a viable competitor. 
The Justice Department did not allow us to purchase Ticketron's 
proprietary software. That was purchased by a competitor of ours, 
the Shubert organization. All we bought were certain contracts and 
certain equipment. 

Unfortunately, because Ticketron neglected to segregate their cli- 
ents' funds from their operating accounts, if Ticketron had been al- 
lowed to file bankruptcy, the public, the buildings, the arenas, and 
the entertainers would have suffered a loss of somewhere between 
$13 and $16 million. Such losses would have been a black eye to 
the entire ticketing industry. As a result, the Justice Department 
allowed Ticketmaster to purchase some of Ticketron's assets. 

Now I would like to address Ticketmaster's service charges. 

[The information referred to follows:] 



85-914 O - Q5 - 4 



94 




Peat Marwick 



nCKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of 
Ticketmaster Holdings Group, Ltd.) 

Consolidated Financicil Statements 

January 31, 1994 and 1993 

(With Independent Auditors' Report Thereon) 



95 




Peat Marwick 

Certified Public Accountants 

725 Souih Figueroa Street 
Los Angeies. CA 90017 



Independent Auditors' report 



The Board of Directors 
Ticketmaster Corporation: 

We have audited the accompanyirtg consolidated balance sheet of Ticketmaster Corporation and 
subsidiaries (a wholly owned subsidiary of Ticketmaster Holdings Group, Ltd.) (the Company) as of 
January 31, 1994 and the related consolidated statements of income, shareholder's equity (deficiency) 
and cash flows for the year then ended. These consolidated financial statements are the 
responsibility of the Compemy's management. Our responsibility is to express an opinion on these 
consolidated financial statements based on our audit. The consolidated financial statements for 
Ticketmaster Corporation and subsidiaries as of and for the year ended January 31, 1993 were audited 
by other auditors whose report dated May 1, 1993 expressed an unqualified opinion on those 
consolidated financial statements. 

We conducted our audit in accordance with generally accepted auditing standards. Those standards 
require that we plan and perform the audit to obtain reasonable cissurance about whether the 
financial statements are free of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the eimounts and disclosures in the finandid statements. An audit also includes 
assessing the accounting principles used and significant estimates made by management, as well as 
evaluating the overeJl financial statement presentation. We believe that our audit provides a 
reasonable basis for our opinion. 

In our opiiuon, the 1994 consolidated financial statements referred to above present fairly, in all 
material respects, the financial position of Ticketmaster Corporation and subsidiaries as of 
January 31, 1994 and the results of their operations and their cash flows for the year then ended in 
conformity with generally accepted accounting principles. 

As discussed in note 6 to the consolidated financial statements, two subsidiaries of the Company are 
codefendants in legal actions, the ultimate outcome of which cannot presentiy be determined. 
Accordingly, no provision for any liability that may result from this litigation has been recognized in 
the accompanying consolidated financial statements. 

As discussed in note 1 to the consolidated firumdal statements, the Company changed its method of 
accotmting for income taxes to cortform with Statement of Financial Accoimting Standards No. 109. 



April 11, 1994, except for 
note 9, which is as of 
April 15, 1994. 



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96 



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97 



TICKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Consolidated Statements of Income 
Years ended January 31, 1994 and 1993 



1994 



1993 



IiKome: 

Ticket operations 
Licensing fees 
Interest 
Other 



171,838,000 

2,412,000 

1,499,000 

14,026,000 

189,775,000 



152,523,000 

2,392,000 

1,483,000 

15,605,000 

172,003,000 



Costs and expenses: 
Ticket operations 
I'hone center 
Sales and marketing 
Data processing 
General and administrative 
Other 



72,350,000 

19,927,000 

7,161,000 

18,370,000 

46,611,000 

815,000 

165,234,000 



63,451,000 

18,124,000 

7,967,000 

17,797,000 

33,704,000 

848,000 

141,891,000 



Income before depredation ea\d amortizatioiv 
interest expense and minority interest 

Depreciation and amortization 
Interest expense 
Minority interest 

Income before income taxes 

Income taxes 

Net income 



24^1,000 

14,205,000 
1,435,000 
2374,000 

6,027,000 

4,600,000 



30,112,000 

13,677,000 
1,607,000 
1,728,000 

13,100,000 

5,600,000 



$ 1,427,000 $ 7300,000 



See accompanying notes to consolidated financial statements. 



98 



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99 



TICKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Consolidated Statements of Cash Flows 
Years ended January 31, 1994 and 1993 



1994 



1993 



Cash flows from o{>erating activities: 
Net income 

Adjustments to lecondle net income to net cash provided by 
operating activities: 
Depreciation and amortization 
Income allocable to minority interest 
Deferred income taxes 
Changes in operating assets and liabilities: 
Accovmts receivable, other 
Accounts receivable, ticket sales 
Inventory 
Prepaid expenses 
Accounts payable, trade 
Accounts p>ayable, clients 
Accrued exfjenses 
Deferred income and other 

Net cash provided by operating activities 

Cash flows from investing activities: 

Purchase of equipment and leasehold improvements 
Other intangible assets 

Net cash used in investing activities 

Cash flows from fiiumdng activities: 
Investments by minority shareholders 
Distributions to nunority shareholders 
Proceeds from long-term dd>t 
Reduction of long-term debt 
Redemption and retirement of preferred stock 
Payment of dividends 

Net cash used in financing activities 
Effect of exchcmge rate on cash emd cash equivalents 

Net increase in cash emd cash equivedents 
Cash and cash equivalents, beginning of year 
Cash and cash equivalents, end of year 

(Continued) 



$ 1,427,000 $ 



7,500,000 



14,205,000 


13,677,000 


2,874,000 


1,728,000 


(60,000) 


(55,000) 


(269,000) 


123,000 


(5,379,000) 


(5,186,000) 


(655,000) 


3,000 


(44,000) 


(540,000) 


(81,000) 


1,678,000 


5,302,000 


10,674,000 


1,821,000 


1,016,000 


1,409,000 


3,205,000 



20,550,000 



(431,000) 
(527,000) 

(4,728,000) 



1,750,000 
(5,450,000) 
40,966,000 
(24,769,000) 
(10,593,000) 
(15,749,000) 

(13,845,000) 

4,000 

1,981,000 

30,257,000 



33,823,000 



(8,648,000) 
(6,613,000) 

(15,261,000) 



4,180,000 
(3,915,000) 
10,020,000 
(14,936,000) 
(2,986,000) 
(3,261,000) 

(10,898,000) 

(97,000) 

7367,000 

22,690,000 



$ 32,238,000 $ 30,257,000 



100 



TICKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Consolidated Statements of Cash Flows, Continued 



1994 



1993 



Supplemental disclosures of cash flow information: 
Cash paid during the yeai for: 
Interest 
Income taxes 



$ 1,435,000 
4,743,000 



1,607,000 
5,053,000 



See accompanying notes to consolidated financial statements. 



101 



nCKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of 'Iicketmaster Holdings Group, Ltd.) 

Notes to Consolidated Financial Statements 
January 31, 1994 and 1993 



£U gummary <?i Significant Accovmting Pgliae? 

Ticketmaster Corporation (Company) is a wholly owned subsidiary of Iicketmaster Holdings 
Group, Ltd. (Holdings). The Compemy provides automated ticketing services to organizatioiis 
that sponsor events in order to allow their customers the ability to purchase tickets to those 
events from oudets or via the telephone. 

Principles of Cor^solidation 

The consolidated financial statements include die accoimts of the Company, its subsidiaries ju\d 
certain less than wholly owned joint ventures where ttie Conr^any has operating control, after 
elimination of all material intercompany balances imd tremsactions. 

Cash and Cash Equivalents 

The Company considers all highly liquid debt instnmtents purchased witti a maturity of three 
months or less to be cash equivalents. 

Inventory 

Inventory, consisting of systems hardware and supplies, is stated at the lower of cost (specific- 
identification) or mcirket 

Equipment and Leasehold Improvements 

Equipment and leasehold improvements are stated at cost. Depreciation and amortization are 
computed using the straight-line method over the estimated useful lives of the related assets 
or, for lecisehold improvements, the term of the lease, if shorter. When assets are retired or 
otherwise disposed of, the cost is removed from the asset account and the corresponding 
accumulated depreciation is removed from the related allowance account and any gain or loss is 
reflected in results of operations. 

Cost in Excess of Net Assets Acqvtired 

The cost in excess of net Eissets acquired is being amortized by the straight-line method over 
terms of up to ten years. 

Revenue Recognition 

Income from ticket Ojjerations is recognized on the accrual betsis as tickets are sold. 



102 



TICaCETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Notes to Consolidated Financial Statements, Continued 



Income Taxes 

In February 1992, the Financial Accounting Standards Board issued Statement of Financial 
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires a 
change to the asset and liabUity method of accoimting for income taxes and supersedes SFAS 96, 
"Accounting for Income Taxes." Under the SFAS 109 method, deferred tax assets and liabilities 
are recognized with respect to the tax consequences attributable to the differences between the 
financial statement carrying values and tax bases of assets and liabilities. Deferred tax assets 
and liabilities are measured using enacted tax rates expected to apply to taxable income in the 
years in which these temporary differences are expected to be recovered or settled. Further, 
the effect on deferred tax assets and Liabilities of a change in tax rates is recognized in income 
in the period that includes the enactment date. 

The Company adopted SFAS 109 as of February 1, 1993. The cumulative effect of this change in 
accounting for income taxes is not material to the consolidated financial statements. 

Concentration of Credit Risk 

The Company places its temporary cash investments principally in commercial paper with 
large domestic and intematiorud companies and limits the amount of credit exposure in any one 
company. 

Translation of Foreign Currencies 

Foreign assets and liabilities in the consolidated balance sheets have been translated at the 
current rate of exchange on the balance sheet dates. Revenues and expenses cire translated at 
the average exchange rate for the year. Unrealized translation adjustments do not affect the 
results of operations and jure reported as a separate component of shareholders' equity. 

Reclassifications 

Certain reclassifications have been made to prior year consoUdated financial statements to 
conform with the current year presentation. 

(2) Stock Transactions 

The Series I and II preferred stock is entitied to receive an annued c\imulative dividend of $.12 
and $.024 per shctre, respectively. The Company may, at its option, redeem the outstanding 
Series I and n preferred stock at any time at a redemption price (liquidation preference) of 
$1.00 and $.20 per share, respectively, plus accrued and unpaid dividends. The Series I 
preferred stock has no voting rights, while the Series II preferred shareholders are entitied to 
one vote per share. 

During June and December 1992, the Company repurchased 2,985,439 outst<mding shares of its 
Series I preferred stock at a redemption price of $1.00 per share and paid dividends in arrears 
of $3,261,000. Dividends in arrears on the preferred stock outstanding at January 31, 1993 
approximated $11,887,000. 



103 



TICKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Notes to Consolidated Financial Statements, Continued 



In November and December of 1993, the Company repurchased the 9,452,982 and 5,700375 
outstanding shares of its Series I smd Series II preferred stock at a redemption price of $1.00 and 
$.20 per share, respectively, and paid aggregate dividends in arteais amoimting to $12,848,000. 

(3) Other Intangible Assets. Net 

Other intangible assets consist of the following: 

1994 1993 



Purchased user agreements $ 22,556,000 $ 28,673,000 

Covenants not to conq^ete 2,034,000 2,627,000 

Other 1,597,000 1,585,000 



$ 26,187,000 $ 32,885,000 



During fiscal years 1994 and 1993, the Company acqiiired user agreements with venues in 
selected geographical areas of the United States (U.S.) and the United Kingdom (U.K.). The 
acquired user agreements allow the Company the exclusive right in the U.S. and the non- 
exclusive right in the U.K. to provide ticketing services for the related venue. 

The purchased user agreements and other intangible assets are being amortized gei\erally in 
accordance with the contract terms: either on a stredght-Une basis or based upon yearly ticket 
sales by the facilities, including any annual minimum guarantees specified by the contract. The 
lives of the contracts generally range from two to ten years. The covenants not to comf>ete are 
being amortized using the straight-line method over the lives of the noncompetition 
agreements, remging from 2 to 25 years. 

a) Lon g-Term Debt 

Long-term debt at January 31, 1994 and 1993 is as follows: 

1994 1993 



Note payable to bank, collateralized by certain 
Company assets, interest at the London Inter-Bank 
Offering Rate (3.125% at January 31, 1994) plus the 
applicable margin <ts defined (1.75% at Jsinuary 31, 
1994), payable in quarterly installments through 
October 31, 1998 $ 33,250,000 $ — 

Notes payable to bemk, collateralized by Company 
assets, interest at the bank's prime rate (6% at 
January 31, 1993), payable at various dates through 
March 1996 — 10,012,000 



104 



TICKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Notes to Consolidated Financial Statements, Continued 



1994 1993 



Notes payable to bcink, collateralized by Company 
assets, interest at the bank's prime rate (6% at 
Jamuary 31, 1993) plus 3/4%, payable in monthly 
installments through April 30, 1996 $ — $ 5,812,000 

Note payable to bank on $5,000,000 revolving line of 
creidit, collateralized by certadn Compciny assets, 
interest at the bank's prime rate (6% at January 31, 
1994 and 1993, respectively), payable through 
October 1998 and 1993, for the years ended 1994 and 
1993, respectively 550,000 1,550,000 

Note payable to bank on $6,000,000 and $8,000,000 
commitment on January 31, 1994 and 1993, respec- 
tively, collateralized by certain Company assets, 
interest at the bank's prime rate (6% at January 31, 
1994), payable through October 1998 and 1993, for 
the years ended 1994 and 1993, respectively 350,000 — 

Note payable for acquisition of joint venture partner's 
interest, interest at prime rate (6% at January 31, 
1993), paid in full on April 1, 1993 — 446,000 

Obligation payable for assets acquired, imputed 
interest at 9.4%, payable in monthly irtstallments 
through November 30, 1997 473,000 567,000 

Obligation payable for assets acquired, imputed 
interest at a foreign bank's base rate, payable in 
equal amoxmts through fiscal 1995 262,000 520,000 

Obligation payable on a revolving line of credit, 
collateralized by Company assets, interest at the 
foreign bank's base rate plus 1.5%, payable through 
April 30, 1994 174,000 223,000 

Other 528,000 260,000 



35387,000 19,390,000 

Less cvirrent portion (including revolving line of credit) 8,651,000 9,344,000 

$ 26,936,000 $ 10,046,000 



105 



TICKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Notes to Consolidated Financial Statements, Continued 



Annual principal payments due subsequent to January 31, 1994 are cis follows: 



Year ending January 


31: 






1995 




$ 


8,651,000 


1996 






7,331,000 


1997 






7,175,000 


1998 






7,167,000 


1999 




$ 


5,263,000 




35,587,000 



The revolving line of credit and notes payable to bank aggregating $34,150,000 and $17,374,000 
at January 31, 1994 and 1993, respectively, are subject to certain restrictive covenants relating to 
net worth, cash flows euid capital expenditures. The Compcmy weis in compliance with its 
restrictive covenants or has obtained the necessary waivers from its bank for the fisc<il years 
ended January 31, 1994 and 1993. 

The Comjwny has an imused loan commitment from the bank for $14,000,000 for funding 
acqiiisitions which expires October 1998. Additionally, the bfink had issued standby letters of 
credit for approximately $308,000 as of January 31, 1994. 

(5) Income Taxes 

As discussed in note 1 , die Company has applied the requirements of SFAS 109 as of 
February 1, 1993. Ihe cumulative effect of this change in accoimting for income taxes is not 
material. 

Deferred income taxes result from temporary differences in the tax and financial reporting bases 
of certain assets and liabilities. At January 31, 1994, the sources of these differences and the tax 
effect of each were as follows: 





$_ 


Assets 


_$_ 


Liabilities 


. *_ 


Total 


irrent - state tax expense 


76,000 


76,000 


mcurrent 

Amortization of intangible assets 

Accelerated depreciation 

Other 




120,000 




(1,013,000) 
(13,000) 

(1,026,000) 




120,000 
(1,013,000) 
(13,000) 


Subtotal - noncunent 


120,000 


(906,000) 


Total 


$_ 


196,000 


$ 


(1,026,000) 


$ 


(830,000) 



106 



TIC3CETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketnuister Holdings Group, Ltd.) 

Notes to Consolidated Financial Statements, Continued 



The provision for income taxes consists of the following: 

1994 1993 



Current 










Federal 


$ 


3,736,000 


$ 


4,330,000 


State 




924,000 




1,325,000 


Deferred 




(60,000) 




(55,000) 



$ 4,600,000 $ 5,600,000 



The differences between the statutory Federal income tax rate and the effective rate as 
reflected in the consolidated statements of income are attributable primarily to state taxes, 
non-deductible capital transaction costs, entertainment expenses and loss from foreign 
operatioiis. 

<6) Commitments and Contingencies 

Two subsidiaries of die Company, certain licensees of the Coo^any and certain venues and 
professional sporting organizations operating in Florida are codefendants in a consolidated 
dvil antitrust class action suit filed in the Federal District Court of South Florida. The 
complaints allege violations of the Sherman Act, the Federal RICO Act, and multiple Florida 
statutes concerning the sale of off-site tickets. 

The above action is in the preliminary stages, and legal counsel is unable to make a prediction 
of its outcome. The Company denies any liability, intends to vigorously defend ti\e action and 
expects that its outcome will not have a material effect on the financial position of die 
Compemy. The consolidated financial statements do not include any amount for the ultimate 
liability, if any, in cormection with the disposition of this matter. 

A subsidiary of the Company which operates in Southern California and a licensee of the 
Company operating in Northern California are codefendants in a coiuoUdated dvil antitrust 
class action in the Superior Court of the State of California, County of San Frsmcisco. The 
compUints allege violations of state unfair competition and imfair trade practices statutes and 
the California Cartwright Act Each of the four consolidated actions seeks injunctive relief and 
treble damages. 

The above action was settled in April of 1994. Certain plaintiffs have opted out of the 
settiement and have filed a motion for summary adjudication. The Comp2my believes that the 
ultimate outcome of dte disposition of these matters will not have a material adverse effect on 
the financial position of the Company. 

The Company is involved in various other litigation and claims arising out of the normal 
conduct of its business. In the opinion of the Company's maiuigement none of these proceedings 
will have a material adverse effect on the Company's firumdal position. 



107 



TICKETMASTER CORPORATION 
AND SUBSIDIARIES 

(A Wholly Owned Subsidiary of Ticketmaster Holdings Group, Ltd.) 

Notes to Consolidated Financial Statements, Continued 



The Company leases office space and equipment under various operating leases that expire at 
various dates through 2003. Future minimum lease pa)Tnents are as follows as of January 31, 
1994: 

Year Amount 



1995 


$ 


5,270,000 


1996 




4,866,000 


1997 




4,482,000 


1998 




4,327,000 


1999 




3,826,000 


Thereafter 


$ 


7,031,000 




29,802,000 



Additional rental payments may be required for the Company's pro rata share of certain 
operating expenses associated with office space leases. 

Rental expense for fiscal 1994 and 1993 amovmted to approximately $5,207,000 and $6,032,000, 
respectively, imder operating leases. 

The Company, as a minority interest partner in a joint venture, hjis committed to contribute 
amounts up to $10 million during a several-year period representing the development and early 
operating stages of a cable television channel 

(7) 401(k) Plan 

The Company has a 401 (k) plan covering all eligible employees, which contains an employer 
matching feature of 25% up to a maximum of 6% of the employee's contribution. The Company's 
contribution for the plan years ended December 31, 1993 and 1992 was $236,000 and $194,000, 
respectively. 

(8) Subsequent Event 

On April 15, 1994, the Company completed the formation of a joint venture with Wembley pic 
to develop, design and service computer ticket systems to be used in various venues including 
motion picture theaters, stadiums, arenas and amusements parks. Under the terms of the 
agreement, Wembley pic contributed certain assets of its U.S. and U.K. companies smd the stock 
of a German subsidiary (Wembley companies), all of which have similar operations to those of 
the joint venture. The Compciny contributed $16 million in cash for its 50% interest Jind the joint 
venture assumed certain liabilities of the Wembley companies approximating $10 million. 

The $16 million contribution was funded by utilizing $12 million of the $14 million loan 
commitment for acquisitions (note 4), with the remaining $4 million having been provided from 
operations. 



108 

Mr. CoNDiT. Mr. Rosen, we have an easel over here. 

Mr. Rosen. We need to set up a couple of these charts, if we 
may. 

Mr. CoNDiT. We will try to accommodate you. 

Mr. Rosen. There has been a lot of discussion about what our 
service charges are and how much they have risen. I thought it 
would be helpful to provide you with charts which have been taken 
from our audited financial statements that summarize 
Ticketmaster's service charges. 

In 1990, we sold 29 million tickets through outlets and over the 
phones, which provided a service charge revenue of $78 million — 
the average service charge was $2.69. In 1991, we sold 39 million 
tickets with a service charge revenue of $113 million, and the aver- 
age service charge was $2.90. In 1992, approximately 145 million 
tickets were sold; the average service charge was $3.02. And in 
1993, 51 million tickets were sold, with an average service charge 
of $3.15. 

If we go back to the other chart, what you will see is that the 
percentage increase in Ticketmaster's service charges was less than 
4 percent from 1989 to 1990; less than 8 percent from 1990 to 1991; 
approximately 4 percent in 1992; and approximately 4 percent in 
1993. These increases are hardly outrageous, they are essentially 
in keeping with the rate of inflation. That is hardly monopoly pric- 
ing. 

In connection with the materials we have given to you, our profit 
after taxes over the last 2 years has been $7.5 million in 1992 and 
$1.4 million in 1993. The numbers speak for themselves. 

We built our company up from nothing by being responsive to 
consumers. If we were not responsive, we would not have grown. 
I hear a lot of talk of dissatisfaction these davs with Ticketmaster 
as a company. But when you get 3 million call attempts in 20 min- 
utes, there is no way you are going to answer all those calls. Last 
year we answered approximately 38 million phone calls, of which 
approximately 7.5 million resulted in orders. We are an informa- 
tion source for Ticket buyers and every call for the consumer is 
free. Every call to Ticketmaster is answered by an operator. We 
provide an information service at no cost to consumers throughout 
the markets that we serve. Even telephone companies today charge 
people for information. We recognize that we are in a field that is 
highly competitive. 

What the panels — and they have all been very good — all missed 
was that our contracts with venues expire. Contracts have dura- 
tions of 3 to 5 years. There are probably 30, 40, even 50 companies 
out there today that are bidding against Ticketmaster for ticketing 
concessions across the countiy. 

As we move into the age of the information highway, you will see 
cable companies, telephone companies, computer companies, and 
data companies looking to enter this business. This business is 
highly competitive. We do not simply sell tickets to rock and roll 
concerts. We are a mass merchandising distribution system that 
serves all events: sports, concerts, family shows, theater, trade 
shows, ski lift tickets, et cetera. Wherever there is an admission 
ticket, we can provide the distribution network. In the universe of 
tickets sold in America today, there are approximately IV2 billion 



109 

tickets sold for live events per year, and we only sell approximately 
51 million of those tickets. 

Unlike many other services that provide the same product to 
every consumer, we can never provide everyone with the same seat. 
The fact of the matter is that when you sell front to back, half the 
people will be sitting in places thev do not want to sit. So there 
are some problems Ticketmaster will never to able to solve. 

I will be happy to respond to any of the questions you may have, 
and I thank you for the time you have given me. 

Mr. CONDIT. Thank you, Mr. Rosen. 

Next we have Ms. Rothman, the Greneral Manager of the Los An- 
geles Forum in Inglewood. Thank you for being here. 

STATEMENT OF CLAIRE L. ROTHMAN, GENERAL MANAGER, 
LOS ANGELES FORUM, INGLEWOOD, CA 

Ms. Rothman. Thank you, Mr. Chairman. 

At the risk of repeating so many things that have been discussed, 
I will forego the formalized statement that I wanted to make. I 
would like to have an opportunity to make just a few statements 
in answer to some of the things that have been said in an effort 
to clarify. 

First of all, I want to commend every one that has spoken today. 
I think it represents sincerity in their positions and passion in the 
dedication that they feel about this industry. 

I have been fortunate enough to be in this marvelous industry 
for about 27 years. So I have seen many changes, from the times 
that we dealt only in hard tickets where we could hardly find 
enough room to rack 29 performances of a circus, where men with 
garters around their shirt sleeves fanned tickets to their ear and 
very often accurately said there's 100 tickets in this pile. 

A venue is a very important part of the mix that is being dis- 
cussed today. We are inevitably joined because a venue needs an 
act, an act needs a venue, and we both need a means of selling the 
tickets or none of us are able to operate. 

As a venue operator, contracts are very beneficial to us. We have 
contracts for the softdrinks that we sell. We have contracts for the 
food concessionaire. We have contracts about naming the building. 
Novelties are sold by contract. 

And in answer to one of the remarks that was made, the building 
has nothing to do with the price that an act sells its merchandise, 
its T-shirts or its programs for. Those are things set by the act. So 
if he is interested in controlling the costs of those, he makes them 
less expensive. 

The Forum is one place at which you can always come to buy a 
ticket. There is never a service charge at the Forum, and we have 
fought assiduously to keep it that way. 

Someone made the remark this morning that there are two sides 
to this: the promoters, the managers, the agents on one side; 
Ticketmaster on the other. Well, I would like to say we are the guy 
in the middle. 

Mr. Rascoflf talked about being with the Rolling Stones since 
1975. I would like to remind him and educate you to the fact that 
in 1975, when we had an exclusive contract with Ticketron, Mr. 
Rascoff decided or the powers that be decided that we would put 



110 

the Rolling Stones on sale when they made an announcement in 
New York at 12 noon, making it 9 a.m. in Los Angeles. 

We put five shows on sale. Our box office was open from 9 a.m. 
until 10 p.m. that night. We had every window opened and had 
backup sellers. Even though the demand was there, we were un- 
able to physically sell out all the tickets in that 1 day in that 13- 
hour period of time. 

Another point that was brought up is how would we deal with 
a computerized ticket service that might charge the same thing for 
a service charge or a fee, a convenience fee as the price of the tick- 
et. Well, in this case, the venue does have some power. We are in 
business to stay in business, to have the opportunity to continue 
to present the wonderful acts that are available. 

Surely, as good business people, we would never allow the con- 
tract to remam in force over which we could not stop a totally un- 
fair price. 

I also remember back to mail orders, and I certainly hope we 
never go back to that. I remember a particular time when so much 
mail came that we attempted to assess the amount of orders and 
the number of tickets that were held in each bag, and it was deter- 
mined that perhaps 14 bags of mail would sell out a particular 
show. So we sent all the other mail back unopened so that we 
didn't have to process everything and make a list of everything. 

Well, our calculation was incorrect. And, therefore, we had to put 
some tickets on public sale. It wasn't a very fair method of distribu- 
tion. 

One other thing I would like to address. Mr. Collins said that at 
his most recent show at the Los Angeles venue, the Great Western 
Forum, that he questioned the people in the first several rows as 
to how they got their tickets. Tickets are distributed over a wide 
number of outlets. 

There is no way that the venue, no matter how sincere we are 
in trying, can control the person's ultimate distribution of what 
they do with their six tickets that they buv. They may sell them 
all to somebody else. They may give some of them away. They may 
sell them to a broker for profit. 

But I assure — I would like to go on the record that the Forum 
follows the directions of the promoter who, in turn, is following the 
directions of the act as to how the tickets go out of the Forum. 

Thank you for this opportunity. 

Mr. CONDIT. Thank you very much. 

[The prepared statement of Ms. Rothman follows:] 



Ill 



STATEMENT OF 



CLAIRE L. ROTHMAN 

General Manager, Great Western Fonnn 

Vice President, California Sports, Incoiporated 

President, California Forum 



Before 

Information, Justice, Transportation and Agriculture 

Subcommittee 

of the 

Committee on Government Operations 

June 30, 1994 



112 



STATEMENT 
CLAIRE L. ROTHMAN 



The venue deals with a promoter and sometimes an agem and sometimes a manager of an act 
to determine the dates, the confirmation of your venue and the ticket price. Oft times, the venue 
can interject a thought about what the market will bear, that in comparison to other acts it's too 
high, it's too low, but in the final analysis, it is die act that has the power to determine the 
venue, the dates, and the price. TicketMaster has m voice whatsoever in determining the 
pricing of a ticket in our venue. 

Service charges are determined by negotiation r e d u ce d to a contract, similar to contracts that we 
have with the food concessionaire, Doveities concessionaire, not too different from the sale of 
signage in the building, sponsorships of a team or the building, or even die naming of the 
building, security contract, almost anything for services and/or products are reduced to a 
contraa after a period of negotiation. 

Wc have a great need for a ticketing network in a far-fiuag geographic area like Los Angeles. 
The days of small venues within neighborhoods which afforded you an opportunity to trot down 
to the venue, buy a ticket and return diat night are long gone. Niany of our patrons are traveling 
40-45 miles and further to come here. There is no way they are going to come to the building, 
buy a ticket, go back home and return again. A network allows us tremendous speed in selling. 
Twent>' years ago in our very building, we thought it was miraculous that we were able to sell 
100 tickets a minute or 6.000 tickets an hour. Today, we almost have die capacity to sell in a 
minute what took us an hour twenty years ago. And just seven years before that, we were 
dealing in hard tickets where it took an entire box office to rack a two week stand of the circus, 
and where miraculous men with garters on their sleeves would take a pack of tickets that had 
been rubber-banded, ^n them by their ear and say there's 100 tickets here. 

Computerized ticketing gives us accuracy of inventory. Ticket reports are based on what's 
unsold; your inventory is critical so you're not paying out more money than what you've taken 
in. In the days when hard tickets were distributed to a few outlets, you had limited access to 
the inventory in different locations because die seats just weren't there. You had an expense to 
distribute tickets to outlets and run around all over a city and try to collea day by day the 
information on what had been sold. You always had die fear, that lump in your tummy, would 
the outlet be able to pay you. If they didn't do business, you were concerned you placed your 
tickets in the wrong place; if they did do business, you were concerned would they have the 
money to pay you. We had tremendous expense in holding ticket sales on our own property as 
well as selling them from the outlets. We could never sell as quickly on our propeny as the 
oudets, so we'd have to suspend sale at the oudets and the phones in order to try to guess how 
many tickets we needed for the people in our parking lot There is great expense to do this. 
Sometimes rwo or three days before the sale, we had to secure the parking lot, discourage people 
from lining up, we certainly needed a lot of security, stamping hands, handing out numbers, we 
needed a great many ticket sellers, and after it was all over, success or failure, you sure had a 

1 



113 



dirty parkiiig lot. 

A ticketing network gives us a source of research and development. From this source, we were 
able, in concen with TicketMaster, to customize our computer to speak to TickctMastcr's 
computer through the use of a PC. This enabled us to pull season seats off, to charge our 
customers for individual sales, to have our inventory updated by TicketMaster, and to continue 
to sell all year long while having the ability to connect both computers so that the billing and 
the inventory remained accurate. (Met research and development allowed TicketMaster to 
specialize for us a method to service our subscr^tion tickets, which arc all event tickets. We 
have had as many as 4,000 of these seats, so it was like owning a little theater within our own 
building. Some owners have the same seat for every event. With the multiplicity of events in 
our building, some seat holders have a different seat for hockey, another location for basketball, 
an entirely different location for boxing, another location for tennis, another location for 
concerts, family shows, or any combinadon thereof, and we are able to pull a ticket for an 
account number, and the computer knows which location that account number gets for each 
event. 

We also have customized tickets so that when you buy a ticket at the Forum, you can identify 
it easily as a Forum ticket because our logo is on the face. Our equipment, and maintenance 
of that equipment, is done by TicketMaster. 

We see little change for us since tiie end of Ticketron. We have the same advantages and 
disadvantages of dealing with the public. 

There is a very interesting note. In 1967, when the Spectrum opened in Philadelphia, it was 
outfitted to sell all hard tickets because Ticketron and Computicket, two computerized ticketing 
services that were yet to emerge in the east, had not approached us. The Great Western Forum, 
which was at the time in December 1967 when it opened known as the "Fabulous Forum" was 
the first buildmg in the United States to be totally computerized, and Ticketron was the 
company. 



114 

Mr. Rosen, If I may, there was another thing I would like to 
raise. I received this letter this week. I will give copies to all of you. 

Mr. CONDIT. We will place it in Uie record. 

Mr. Rosen. The letter is to me from Pam Lewis, Garth Brooks' 
manager. Obviously, Grarth Brooks' name has been mentioned here 
this morning and nas been mentioned in various newspaper arti- 
cles as supporting Pearl Jam. However, the letter reads as follows: 

I would like to send you a letter of apolo^ and clarity regarding the recent article 
involving the pending Pearl Jam legal activity with Ticketmaster and my reference 
in the press. I made it clear to the press in our case tickets are printed with the 
base price and with a listing of additional surcharges so that Garth's fans would 
be informed. This is in keeping with the overall philosophy of this organization. We, 
like Pearl Jam, care greatly about the fans and are concerned about high ticket 
prices, whatever the cause. It is the intention of Garth for the fans to know where 
their ticket fees are going — ^the rising building costs, security, parking, et cetera. 

Garth Brooks does not have a quarrel with your organization, and I hope my com- 
ments did not make it appear as though that was the case. He was not in touch 
with the press at all on this issue nor did he speak to anyone or give a quote to 
any media on this matter. 

Garth has been very happy with his association with Ticketmaster. I spoke from 
my perspective not Garth's and Fve tried to make this clear. 

It is signed by Pam Lewis, and a copy was sent to Garth Brooks. 
I feel it is important to put tnat in the record. 

Mr. CoNDiT. At your request, that letter will be placed in the 
record. 

[The information referred to follows:] 



115 







e. 




^ i III tt n «..S e' a 'is n. t 



June 22. 1,994. 

/ 

t ■ 

I I . ■ . . 



I 



Mr. Fred Rosen 

CEO'. - ' •' •. 

Ticketmaster - 

3701 Wilshlre Blvd. 

#74 ^ ' . .'. 

Los Angeles. CA 90010- 

Dear Sir 

I would like to send you a tetter cf apology and clar% regarding the recent . 
article involving the Impending Pearl Jam legal activity with ticketmaster and 'my 
reference in the press, i made it dear to the press tt^t in our case, tidcets are 
printed with the base price alOng witB a llstinErof additional surcharges so that 
Garth's fans would be/infdnned. This is in keeping with the overall phHosophy.of - 
this organization. We, like Pearl Jam. <iste greatly about the fians and are 
concerned about high tic*{e<, prices whatever the cause. It isthe intentipn of ' 
Garth for the fans to know where their ticket fees are going •. the rising building • 
costs, security, parking, etc. • 

Garth Brooks does not have a quarrel vwBi your organtzatran and J hope my 
comments did make if appear as though that was the case. He was not in -^ 
touch with the press at all on this issue nor did he speak to anyorie or give a 
quote to any media on this matter. Garth has been v^ry happy With his 
associatton with Ticketmaster. I spoke fi'om my perspective not Garth's and 
I've tried to make this dear. 

Best regards. 



PamL 
ec; Garth Brooks 




116 

Mr. CONDIT. Mr. Rosen, why do you think Pearl Jam filed a com- 
plaint with the Justice Department? 

Mr. Rosen. I am not sure, sir. 

Mr. CONDIT. Why do you think you are the victim in this issue? 

Mr. Rosen. Because Pearl Jam was not willing to compromise. 
We tried to compromise. We had various promoters contact Pearl 
Jam to try and reach a compromise. However, Pearl Jam at- 
tempted to dictate our service char^je to us. The $1.80 service 
charge was proposed to us on a take it or leave it basis. We chose 
to leave it. If they wanted to tour, they clearly could have done so. 
But we were not willing to lose money distributing tickets for Pearl 
Jam. 

Ticketmaster is certainly an easy target to pick on. 

Mr. CONDIT. Is there anybody else they should have picked on? 

Mr. Rosen. No. They should have been willing to resolve the con- 
flict. They should have compromised. There are various ways it 
could have been resolved. 

Mr. CONDIT. We heard this morning from the band and from oth- 
ers in the music industry although — ^you just read a letter, taking 
issue with their statement there is much support in the industry 
for Pearl Jam's position. Do you believe that is so? If you do, why? 
If you don't, why not? 

Mr. Rosen. I think all of us support low ticket prices. But I don't 
think that is the issue. Ticketmaster does not set ticket prices. I 
think it is commendable that the band wants to hold their ticket 
prices down to $18. I have no problem with that; but we don't set 
the price, whether it is $300 or $16. 

The fact of the matter is that to keep its ticket price at $20, 
Pearl Jam could have agreed to a $17.50 ticket and $2.50 service 
charge or a $17.75 ticket and $2.25 service charge. 

If you look at our profit margins, we would have lost money if 
we charged any less. We should not have to do something that es- 
sentially costs us money just to resolve a conflict with a rock band. 

Mr. CONDIT. What is your profit margin? 

Mr. Rosen. If yoxi look at the financial statements, we made 
about 10 cents a ticket, last year. 

Mr. CONDIT. What is that net? 

Mr. Rosen. Last year was $1.4 million; the year before that our 
net income was approximately $7.5 million. >fet income for the 2 
years together was about $9 million. And we sold approximately 
100 million tickets. If you calculate it, that's about 10 cents a tick- 
et. 

Mr. CONDIT. Mr. Rosen, I use — I made reference to this amount 
as well. I read the paper. I have seen it in the trade publications. 
We are talking about handling charges $5 to $8, although you point 
out today it is $3.15. How did we get to the $5 to $8? 

Mr. Rosen. I have seen service charges as high as $15, but all 
that money doesn't go to Ticketmaster. 

When you have a $350 ticket sold over the phone, there is a $15 
service charge. The money collected for the ticket is divided such 
that: $350 goes to the artist; $9 to $10 goes to the credit card com- 
pany; and $5 to $6 goes to us. 

Mr. CONDIT. Tell me about your company. How many people do 
you employ? Where are they located? 



117 

Mr. Rosen. Today, we employ 4,100 people throughout America. 
We have regional phone rooms in 13 or 14 cities with an extremely 
diverse labor force. We have provided opportunities for many young 
people in entry-level positions in which they learn how to use PCs. 
We are very proud of the fact that we have been able to create so 
many jobs over the last decade. 

Mr. CONDIT. So the total is 

Mr. Rosen. About 4,100 people. 

Mr. CoNDlT. Do you consider those full-time employees or part 
time? 

Mr. Rosen. There is a combination of full time and part-time em- 
ployees. I would say there are somewhere between 1,300 and 1,400 
individuals who work full time. 

Mr. CONDIT. Average salaries? 

Mr. Rosen. I don't know. 

Mr. CONDIT. Do the part-time people receive benefits? They don't 
receive benefits? 

Mr. Rosen. Part time people do not receive benefits. 

Mr. CONDIT. Out of the 4,200 employees how many are part time 
versus full time? 

Mr. Rosen. I think there are 2,500 or 2,700 part-time employees. 
I will supply you with the specific numbers. 

[The information follows:! 

The number of part-time employees is 2,712. 

Mr. CONDIT. It is also — I guess this is something that those of 
us out of the industry can sort of gravitate to. We hear that, you 
know, the surcharge thing again, where a family comes in, buys six 
or seven tickets. Each one of them is charged a surcharge. Is there 
any merit to why they should have to pay each time for each tick- 
et? Why don't you charge for the one transaction. Why can't you 
charge one service fee for the entire purchase? 

Mr. Rosen. The unit of measure in this industry is per ticket. 

I think Ticketron invented the per-ticket charge. That was their 
unit of measurement, and it has become the industry standard. 

Mr. CONDIT. OK. It also has kind of come out of this hearing as 
well that Pearl Jam as well as some other people here made the 
suggestion it would be nice if we could identify what the service or 
handling fee is on the ticket. I consider this truth in advertising. 

I don't know if that solves the problem, but I think for some peo- 
ple such as the entertainer who has to get on the stage, the fami- 
lies that are making all the money on the ticket — it might be help- 
ful to them, for the fans, to know what the total cost for conven- 
ience, service, or handling fees are on the ticket stub or someplace 
else on there. I consider this truth in advertising. Can you do that? 

Mr. Rosen. We do print the service charge on the face of the 
ticket. 

Occasionally, there can be an all-in ticket price. I would say 99 
percent of tickets that we print, however, have the service charge 
printed on them. 

Mr. CONDIT. So is the average $3.15? 

Mr. Rosen. Service charges vary. Sometimes the service charge 
is $1.50, $1.25. Sometimes it is $5 or $6. It depends on the event. 



118 

This gives me an opportunity to clarify certain misconceptions 
that exist in our business. 

Mr. CoNDiT. That's why we have you here today. 

Mr. Rosen. I appreciate that very much. 

We negotiate all our contracts. The service charges are set in the 
contracts through arm's length negotiation with the venues for 
which we provide the ticketing concession. 

Ticketmaster does not have the right to unilaterally set whatever 
service charge it wants. If we did, we wouldn't be in business very 
long. 

Furthermore, as many of the previous panel noted, Ticketmaster 
is not a broker. We are not a scalper. We are not in the business 
of reselling tickets. We have taken a very strong stand against 
scalpers over the years and have tried various procedures to make 
sure that the tickets get into the hands of the people they are sup- 
posed to, namely the public and the fans. 

Mr. CoNDiT. Mr, Rosen, do you believe the Justice Department 
is doing a real investigation? What do you think they are going to 
do with the investigation? 

Mr. Rosen. I believe thej^ are doing a real investigation. 

Mr. CONDIT. OK I will yield. Then we will come back to you, Mr. 
Rosen, Ms. Rothman, to my colleague from California, Mr. Horn. 

Mr. Horn. Thank ^ou very much, Mr. Chairman. 

Mr. Rosen, you might have gone over this, but, just briefly, how 
do you set your charges for a particular venue when you negotiate 
the contract to be the exclusive agent? Is that a percent of what 
the basic ticket price is going to be? 

Mr. Rosen. No. 

Mr. Horn. Is there a general policy here? Is it just what the traf- 
fic will bear? 

Mr. Rosen. No. It is certainly not what the traffic will bear. 
When you negotiate with an arena, their primary concern is bring- 
ing as many people to it as possible. 

Ticketmaster is an extension of the box office. We are not in lieu 
of the box office. We are an alternative to the box office. We call 
it a convenience charge because you don't have to go to the box of- 
fice if you choose not to. Rather, with Ticketmaster, you may 
choose the convenience of purchasing a ticket at an outlet or over 
the phone. 

When we sit down and negotiate a contract, various factors are 
involved in it: How much equipment are we supplying? How much 
support does the building need? How msmy people do we have to 
put on that account? How much money in advertising and other 
promotional items do we need to supply: The contract is negotiated 
on those terms. 

Mr. Horn. Is there a basic price that is in most arena managers' 
contracts as to what they need to recoup from you to in turn pay 
the city or the governmental entity that often owns these arenas? 

Mr. Rosen. We are a concessionaire in the building, sir, and 
every building wants to see how much they can maximize their rev- 
enue. As a result, we are contractually obligated to pay the venues 
consideration for the right to sell their tickets. 

I might point out that the State of California in their State parks 
ticketing contract, which we do not have, the ticket company is re- 



119 

quired to provide financial consideration to the State in return for 
the ticketing concession. I think all buildings, when they sit across 
the negotiating table from the concessionaires want to see to what 
extent they can derive the maximum revenue. 

Mr. Horn. Are there any venues where you also operate the tick- 
et office at the venue? 

Mr. Rosen. You mean that we operate the box office? 

Mr. Horn. The box office. 

Mr. Rosen. In a very few places we do, but for the most part 
each box office is operated by the venue or the owner of the venue. 

Mr. Horn. Where you don't do it, what is the percent of tickets 
sold that comes from the box office versus Ticketmaster? 

Mr. Rosen. When you provide an inventory control system for a 
venue, there are various events that take place in that building. A 
building might have a hockey team, basketball team, family shows, 
concerts, wrestling. So if you add up the universe of tickets that 
our system generates or provides the accounting for, Ticketmaster 
sells somewhere in the neighborhood of 20 percent of the tickets in 
a major arena, maybe more for certain events than others. 

Let me give you some statistics. Major league baseball last year 
sold 70 million tickets. We sold 5 million. The NBA sold 17 million 
tickets. We sold approximately 1.1 million. It is interesting in our 
business that as a team does better, season ticket sales go up, 
group ticket sales go up, mini plan and package sales go up. Thus, 
there are fewer tickets for Ticketmaster to sell. The better the 
team, the fewer the tickets. 

Mr. Horn. In the venue, the building, do you have an exclusive 
contract with most of them to sell for all the events they are hold- 
ing or just select events? 

Mr. Rosen. No. When you enter into a contract with an arena, 
you acquire the exclusive right to provide tickets for all the events 
that take place in that building. 

Mr, Horn. OK We have seen once sacrosanct fees such as those 
of real estate brokers, those of stockbrokers that used to be a fixed 
percentage change rapidly in the last few years so they are nego- 
tiated based on volume discounts and, very firankly, what the test 
of the market and competition will bear. Why aren't more fees in 
this industry negotiated or are they? 

Mr. Rosen. They are all negotiated. 

Mr. Horn. But you negotiate a sort of set fee for a certain price 
ticket with the venue, so they know what revenue to expect from 
you if you have got 20 percent of their sales? How does it work? 

Mr. Rosen. You define contracts by type of event. Different 
events have different service charges that are negotiated, and reve- 
nue streams are determined based on the service charge. 

Mr. Horn. Now, is the service charge paying the credit card? 

Mr. Rosen. In some instances, yes, in some instances, no, 

Mr. Horn. How do they vary? Aren't you performing the same 
task for every type of ticket that crosses your box office or wher- 
ever it is? 

Mr. Rosen. No, This business was built on choice. If you don't 
want to pay a service charge, you go to the box office. If you want 
a lesser service charge, you can drive to an outlet. And if you don't 
want to leave your home, you can pick up the phone and call. 



120 

When you get into the phones charges, there are some interest- 
ing issues. In some instances the buildings pay the credit card fee 
and the service charge is lower. In instances where artists and 
bands come in the building and can dictate the terms of their con- 
tract, they say to the building, we don't want to pay the credit card 
fees. The building in turn will call us, and we adjust the service 
charge to reflect the credit card fee. So, there is no universal an- 
swer to your question. 

Mr. Horn. Can you name some of the rock bands that do not use 
Ticketmaster to distribute their tickets and what percentage rough- 
ly do not use your services? 

Mr. Rosen. I don't know, sir. I don't keep track of that. 

Mr. Horn. You don't really look at your potential customers? 

Mr. Rosen. We feel we have two customers. Our actual clients 
are the buildings. We compete for their business every time a con- 
tract comes up. 

Mr. Horn. How often is that generally? Is it year-to-year, or 
longer, such as 5 years? 

Mr. Rosen. Contracts are typically for 3 to 5 years. The fact is 
that with the technology as it exists today, many facilities have the 
ability to do their ticketing themselves. Venues can acquire very in- 
expensive computer systems to provide essentially the same service 
we do. So the reality is that we are in a competitive environment. 

Mr. Horn. What sort of competitors' service charges, what are 
they compared to vour own? You must look at your competitors be- 
cause they might be bidding against you on the next contract. How 
do your fees stock up with those of your competitors? 

Mr. Rosen. I think that you will find that our fees have always 
been competitive. When we bid for ticketing concessions, buildings 
want to maximize their revenue, but at the same time they want 
to maintain what they consider to be a fair price that people will 
pay for the service. When we go through this process we are com- 
petitive with the other people who bid. We provide a fair price as 
well as a fair return for the buildings. 

Here in Washington we do not own the ticketing system, we li- 
cense it. Wolf Trap, however, is ticketed by a competitor of 
Ticketmasters called ProTix; it is not a Ticketmaster building. So 
there are competitors around who clearly can do the same job we 
do. 

Mr. Horn. I believe the chairman wanted to follow up. 

Mr. CONDIT. Mr. Rosen might have responded to that. A lot of 
people you notice, when you say your competitors, those people who 
believe you have a monopoly, they want to know who your competi- 
tors are, maybe you could identify some of those. You have done 
that in written form, but maybe you could share that. I am sorry, 
thank you for yielding. 

Mr. Horn. No problem. 

Mr. Rosen. Competing with Ticketmaster today are: The Home 
Shopping Network, Art Soft, Laser Gate, Prologue Select, SofTix, 
and Sun Micro Systems. I could name more. There are many peo- 
ple that feel this is a good business to get into and we hear of new 
competitors on a regular basis. 

Mr. Horn. If I were the chief executive of your firm I would start 
looking at where are the 50 major cities based on population, re- 



121 

gional population because those are your customers that are going 
to pay your charges and want to go to the events and assuming 
there is a decent forum or a variety of forums, stadiums in the 
area. 

As you look at the 50 or 100 major cities in declining order of 
population — ^New York, Los Angeles, Chicago, so forth — now many 
of those do you have the exclusive contract? 

Mr. Rosen. How many of those does Ticketmaster have? 

Mr. Horn. How many of those 50, 100 most populous cities do 
you have with the major arena the exclusive contract for ticket 
services? 

Mr. Rosen. I don't know, sir. 

Mr. Horn. Could you furnish it for the record? 

Mr. Rosen. Certainly. 

[The information can be found in the appendix.] 

Mr. Horn. Obviously, what I am interested in is the degree to 
which you have a domination of the most obvious market iot cul- 
tural services. 

Mr. Rosen. Let me give you two examples, if I may. If you go 
to New York, for example, we do not do the ticketing for Shubert 
Theaters, we do not do the ticketing for the U.S. Open, we do not 
do the ticketing for Lincoln Center, we do not do the ticketing for 
Carnegie Hall, we do not do the ticketing for the New York Mets. 
The New York Mets do the ticketing themselves, as do a lot of 
other people. There are probably a dozen other venues in New York 
that we don't have contracts with. 

In Seattle, Pearl Jam's home, we do not have exclusive contracts 
with the Kingdome and the Seattle Coliseum. I can probably name 
about 40 buildings where we don't have exclusive contracts. 

What is more, we do not have exclusive contracts with 90 percent 
of the promoters. In fact, we do not have contracts with two of the 
largest promoters in the country, Michael Cohl of CPI, who is pres- 
ently promoting the Rolling Stones and is probably the largest pro- 
moter in North America, and Bill Graham Presents in San Fran- 
cisco. And there are many more large promoters who we do not 
have contracts with either. 

Mr. Horn. My last question is on the nature of these contracts 
you do have. Have you ever faced a lawsuit by a venue owner? 

Mr. Rosen. No, sir. 

Mr. Horn. Has a venue owner ever declined to extend a contract 
with you? 

Mr. Rosen. Absolutely. 

Mr. Horn. OK, then. So that is based on a competitive bid basis? 
What usually was the concern of the venue owner, you didn't seem 
to be delivering the crowd or the money or what? 

Mr. Rosen. Sometimes you lose contracts with venues because 
they want to try something new. Sometimes they want to try 
ticketing a different way. Sometimes we may not have been as re- 
sponsive as we should be. The lesson of Ticketron was that if you 
are not responsive to the needs of your clients you will go out of 
business. There are always competitors ready to take the contracts 
from us if we don't remain responsive. 

Mr. Horn. You said your length of contract was generally 3 to 
5 years. Do you have any longer than 5 years? 



122 

Mr. Rosen. A few. Not very many. 

Mr. Horn. What are we talking about, 7 years? 

Mr. Rosen. Yes, 7 years. I don't believe there are any 10-year 
contracts anymore. 

Mr. Horn. Thank you. 

Mr. Rosen. Certainly. 

Mr. CoNDiT. Thank you. Mr. Rosen, Ms. Rothman, I want to ex- 
plain to you, I have to leave. I made a commitment for 12:30, and 
I thought we would be out of here by 12, I am going to try to get 
back, but I wanted to explain my absence to you, that I didn't leave 
because the band just left. I am clearly interested in your com- 
ments, and I want to say, Mr. Rosen, you have been very candid 
and very open for us when we have asked for information. You 
have been on the record, you haven't hidden anything, and we ap- 
preciate it very much, and I just want to acknowledge that before 
I leave. 

I will try to get back to ask some additional questions. If I have 
additional questions, I will forward them to you and maybe you can 
respond in writing, and just so that you know, we are in the proc- 
ess of putting up some followup hearings, and we will ask for your 
participation in that. You personally won't have to be here, but 
your participation in that. 

I just want you to excuse me and not take offense to the fact that 
I have to leave. 

Mr. Rosen. We appreciate the opportunity to speak, and if it 
would help, we would like to invite all of you, if you have the time, 
to come see what we do in person. I think if you see what we do 
it will give your some perspective on our philosophy as a company. 
You would be welcome at any time in any of our regional offices 
so that we could give you a demonstration of what it is we do. 

Mr. CONDIT. I am going to leave you in excellent hands. Ms. 
Woolsey is going to Chair the meeting while I am gone. So thank 
you very much. 

Mr. Rosen. Thank you. 

Ms. Woolsey [presiding]. I don't know if we can believe him 
about not following the band, but nevertheless, we will keep going 
and for all of our benefit probably get through this before our chair- 
man gets back. I do have a question of you, Ms. Rothman. 

Does the Los Angeles Forum not contract with Ticketmaster? 

Ms. Rothman. No. The Los Angeles Forum has a contract with 
Ticketmaster. 

Ms. Woolsey. So in your contract you then can sell your own 
tickets onsite? 

Ms. Rothman. Well, we do sell tickets onsite. 

Ms. Woolsey. So that is part of that? 

Ms. Rothman. We have two professional teams, NHL hockey and 
NBA basketball. We sell all our own season tickets. We sell all our 
own season packages. We sell subscription tickets and we sell indi- 
vidual tickets. 

Ms. Woolsey. So what would you do if you had an arrangement 
and were not allowed to sell your own tickets? 

Ms. Rothman. Well, we would never enter into a contract in 
which we could not sell our own tickets. 



123 

Ms. WooLSEY. Then, Mr. Rosen, that is my question, do you have 
some arrangements where the venue or the location cannot sell 
their own tickets? 

Mr. Rosen. No, Madam Chairman. 

Ms. WooLSEY. That was something I was not clear about. Mr. 
Rosen, what kind of recourse does Ticketmaster have if one of the 
talent or one of the groups chooses not to go through Ticketmaster? 
I mean, do you do anything about that? Have you ever threatened 
a venue or a gp^oup? 

Mr. Rosen. If I threatened a venue, I don't think I would be in 
business very long. When we had discussions with various people, 
we told them that we felt it would be proper for them to honor 
their contracts. I didn't find anything wrong with that then. I don't 
find anything wrong with it now. 

Ms. WooLSEY. Do you believe that service charges would be low- 
ered if there were competition, and if so, by how much? 

Mr. Rosen. There is competition now. I think service charges 
have risen to the level that tney have because there is competition. 
Because the buildings require you as a concessionaire to pay them 
for the rights to sell the tickets, competition among concessionaires 
leads to higher concession fees, which leads to higher service 
charges. In a lawsuit against Ticketmaster in San Francisco, the 
economist for the plaintiffs stated that if there was greater com- 
petition, prices would probably go up. He stated that 
Ticketmaster's service charges were what he would expect in a 
fully competitive market and that consumers had not been dam- 
aged. 

Ms. WooLSEY. What do they base that on? 

Mr. Rosen. Because the service charge is based on a competitive 
bid for the ticketing concession. That is the free-market system. 

Ms. WooLSEY. All right. I would like to then ask my colleague, 
Mr. Owens, from New York if he has some questions. 

Mr. Owens. Just one question. I have an appointment I am late 
for also. The terms, "kickback," and, "payofT have been thrown 
around. I think you have partially answered it, but in particular 
what are thev referring to? Are there any agreements you have 
with venues that 

Mr. Rosen. That term, which a New York judge called a term 
of opprobrium or distaste, supposedly describes the consideration 
that we pay to a building contractually for its ticket concession. 
When I make a contract with the Meadowlands, I provide the 
Meadowlands with financial consideration as part of the contract to 
obtain the ticketing concession. Because the Meadowlands is a mu- 
nicipal building, the money we pay to provide the ticketing conces- 
sion is a matter of public record. As a concessionaire we pay for the 
right to do the ticketing — it is like a royalty. 

The band's attorneys have characterized this as a kickback. It is 
an offensive word to me because it implies that we have done some- 
thing illegal. We have not. 

Mr. Owens. But it is not only in writing, it is also public? 

Mr. Rosen. Yes, it is public. 

Mr. Owens. Thank you. 

Mr. Rosen. Thank you. 

Ms. WooLSEY. Mr. Horn has a couple more questions. 



124 

Mr. Horn. Thank you, Madam Chairman. Perhaps you answered 
this, Mr. Rosen. I was out of the room temporarily, but in his testi- 
mony, were you here when Tim Colhns spoke? 

Mr. Rosen. Yes, I was here. 

Mr. Horn. Do you recall, I don't know if you had a chance to an- 
swer what he said, but let me just read it to you. 

In 1989, we approached Ticketmaster at the begianing of an extended world tour 
at which we expected to sell millions of seats. We were seeking a volume rebate in 
consideration oi the enormous amount of business we were doing with this company. 
We either wanted Ticketmaster to lower its service charge or pay some kind of re- 
bate to the band. At a meeting I had with Fred Rosen on January 5, 1993, he re- 
sponded to this proposal by remsing either of these options. Instead, Mr. Rosen sug- 
gested that if the band would allow the ticket price and the service charge to merge, 
to roll them into one price, he would raise Ticketmaster's charge by one dollar per 
ticket and split the proceeds with the band. 

I told Mr. Rosen that his offer was like offering a cold man ice in the winter. His 
solution would make us and him more money at the expense of an already overbur- 
dened young fan. 

Do you have a reaction to that description of your meeting of 
January 5, 1993? 

Mr. Rosen. He also testified, sir, that we put tickets on sale over 
the telephone 3 and 4 days in advance of them going on sale 
through the box office. That is not true. The fact of the matter is 
that when events go on sale, all tickets to the public are made 
available at the same time, so— — 

Mr. Horn. Well, is he accurate in his description of the January 
5, 1993, meeting? 

Mr. Rosen. I don't particularly remember the full details of that 
conversation with Mr, Collins. 

Mr. Horn. Are there any other types of meetings, let's say, with 

f»romoters or concert tour managers, however they want to describe 
ocal or national, where you have been willing to negotiate, put up 
the price in terms of Ticketmaster's charge and make a split of the 
proceeds with the touring group? Is this the only incident? 

Mr, Rosen, No, it is not the only incident, but primarily we deal 
with promoters and buildings, 

Mr, Horn. So you are saying there is give in certain situations? 

Mr. Rosen. Certainly, 

Mr, Horn, And that is an economic judgment? 

Mr, Rosen, That is correct, 

Mr, Horn. And what the traffic will bear, to be honest about it, 
depending on the price, isn't it? 

Mr, Rosen. It is not what the market will bear. In many in- 
stances, the market will bear much more than what people are pre- 
pared to charge for a ticket. As I said before, we see ourselves as 
a mass merchandising distribution system. Some people have sug- 
gested that we should have a one-pnce ticket, like an airline does, 
and there shouldn't be any fee, so we have experimented with that, 

Mr, Horn. Well, I am on the Aviation Subcommittee and I must 
say I have been confused by the airline pricing system, too. Pearl 
Jam claims that they have been boycotted by Ticketmaster. This 
question is to Ms. Rothman and you also, Mr, Rosen, obviously. 

The cancellation of the Pearl Jam tour resulted in lost revenues 
for venues. One would imagine that those venues would be angry 
with Ticketmaster for this loss of income. On the theory that it is 
easier to replace a ticket service agency than a stadium or an 



125 

arena, one would think the venues would be furious with 
Ticketmaster, Is that the case, Ms. Rothman. 

Ms. Rothman. Well, in this case we were not fortunate enough 
to be on Pearl Jam's tour, so I can't really address myself to what 
happened. 

Mr. Horn. But have you seen similar situations at all where 
anybody that uses you on any regular basis feels that they have 
been bovcotted by Ticketmaster? 

Ms. Rothman. In my 20 years at the Forum, I have never had 
that experience. 

Mr. Horn. And Ticketmaster has been the agent over that pe- 
riod? 

Ms. Rothman, No, they have not. We had a contract in 1967 
when the building first opened, we were the first building in the 
country to be totally computerized, and our computerized system 
was with Ticketron, and we remained with Ticketron until, I be- 
lieve, 1983 when Ticketmaster came in. 

Mr. Horn. Then you moved to Ticketmaster? 

Ms. Rothman. Yes. 

Mr. Horn. What were the basic reasons you had for making that 
change? 

Ms. Rothman. A very interesting set of reasons. We had an ex- 
treme desire to have the technology to allow our computers to talk 
with Ticketmaster's computers so that when we billed our season 
seat holders and our subscription seat holders, that we would auto- 
matically get our statements, and our inventory would decrease 
automatically rather than having to handle two inventories. 

Ticketron really didn't have any interest in helping us pursue 
this and had put it off for a couple of years. With the emergence 
of Ticketmaster, they said they would dedicate themselves to that 
end, and, in fact, between 18 months and 2 years after they came 
aboard we did achieve that end, and it has been copied. 

Mr. Horn. So they met your need. Now, when does their contract 
come up with you? Is it a 3 to 5-year contract? 

Ms. Rothman. Yes. 

Mr. Horn. Is there anyone that competes for that business when 
the contract is up? 

Ms. Rothman. Well, I recently had a conversation with someone 
in a ticketing business that came to call upon me and said they 
would like to come again when our contract nears its end. We al- 
ways listen. 

Mr. Horn. Well, do you feel there is sufficient competition in the 
market, in this case tne Los Angeles region, which would include 

Erobably four counties or five in your case, so that you can get the 
est deal you want from the ticketing agency, whether it is 
Ticketmaster or a rival company? Do you feel that you have only 
one person to make a deal with, one entity, namely Ticketmaster 
and all the others are inferior? 

Is it a matter of service? Is it a matter of price, et cetera? I would 
think a lot of these issues would be of concern to you? 

Ms. Rothman. Well, I approach this much as I approach all the 
other contracts that we deal with. Am I getting the kind of service 
that I want? Are thev putting out to the public the face I like? Are 
they doing the job? Are they maintaining what I have and supply- 



126 

ing new equipment and new technology as it goes along? Putting 
all those things in, all those elements in, and adding a source of 
loyalty to someone that you have dealt with, much as my food con- 
cessionaire or the person that has named the building, I sav I can 
negotiate a good deal with a fair return, and they are perwrming 
their service admirably, then I have no reason to feel that I would 
be better off if someone else were knocking at my door, 

Mr, Horn. As a venue manager, are all of you venue managers 
organized in a national association: 

Ms. ROTHMAN. Yes, we are. It is called the International Associa- 
tion of Arena Managers. 

Mr. Horn. So when you get together and talk shop, you talk 
about the type of services you have. What do you hear about 
Ticketmaster when you go to these meetings? Do they seem to have 
satisfied customers? 

Ms. RoTHMAN, Well, I think you find a fair abundance of people 
that are satisfied and continue to go on for the very reasons that 
I set out before you, and you will always find people that have 
some dissatisfaction. You will find people that will make a com- 
plaint about a phone room or a complaint about how quickly the 
lines were dissipated at the outlets, and that is what keeps your 
purveyor on his toes if he listens to your complaints and addresses 
himself to them, 

Mr. Horn. Now, did you ever have Ticketron? 

Ms. Rothman. Yes, we did. 

Mr. Horn. Up to 1983, was it? 

Ms. Rothman. From 1967 to 1983. 

Mr. Horn. Ticketron, I gather from your testimony, simply didn't 
meet your needs and didn t update the equipment, the software, so 
forth, is that basically the case? 

Ms. Rothman. But it was not true all of the time. It was true 
within the last 5 years, I would say, that we were under contract 
with them. We still had the same equipment as when we opened 
the building. 

Mr. Horn. Had they been taken over by another firm and is that 
the reason they didn't update the equipment, they were just trying 
to milk the system? 

Ms. Rothman. No, it was the same firm. 

Mr. Horn. Well, then, we see what happened to them. That is 
what happens in the American enterprise system. You go out of 
business if you don't satisfy your customer. Thank you. Madam 
Chairman. 

Ms. WOOLSEY, Thank you, Mr. Horn. Well, we will bring this to 
a close in just a minute. I want to talk a minute about ticket bro- 
kers. Do you ever, Mr. Rosen, hold blocks of tickets back, or Ms. 
Rothman, and distribute them through ticket brokers? 

Mr. Rosen. No, Madam Chairman. 

Ms. Rothman. No, Madam Chairman. 

Ms. WooLSEY. OK. So then where does all this come when we 
hear about scalpers? I mean there are such things, I have a group 
of children in my family from 27 to 33 years old, and they go to 
a lot of events. They experience scalpers, and if they don't get a 
ticket they can always get one through one, 

Mr, Rosen, May I share a story with you? 



127 

Ms. WOOLSEY. If you would like. 

Mr. Rosen. Scalping and brokers are of concern to all of us. In 
California resale of tickets is legal, and the ticket brokers are very 
diligent. They round up people to stand in line. I have seen them 
bring people by buses to outlets. 

There was a very famous artist who was doing five shows at a 
competitor of Ms. Rothman's venue, and we scrambled the seats so 
that the tickets were randomly dispersed. The tickets were $18, 
and there was a $3 service charge, so four tickets were $84. This 
young lady was so excited because she was going to see her hero, 
and sne walked out of the outlet with tears in her eyes. 

When the girl walked out of the store, there was a scalper stand- 
ing there. He looked at her and asked, "Where are you sitting little 
girl," and she said, "Second row, third night." The scalper offered, 
^$1,000." She said, "No." He offered, "$1,250." She said, "No." He 
said, "$1,500." She said, 'TSTo." Then he looked at her and said, "Lit- 
tle girl, two grand is a lot of money." She took the money. 

The fact of the matter is in a lot of the cities, the pressure on 
young people when they get good tickets is tremendous. There are 
only so many good seats, and there are people willing to pay for 
them. The brokers know that. 

Ms. WooLSEY. First of all, that young woman shouldn't have 
done it just for being called little girl. 

Mr. Rosen. No, I didn't mean it like that. 

Ms. WooLSEY. But second of all, what is the role you are playing 
to prevent this? Is Ticketmaster doing anything to stop this? 

Mr. Rosen. I think that is a very good question, Madam Chair- 
man. We catch brokers and scalpers, and we take them to the local 
authorities. In today's world, however, it is very difficult to get any- 
body to prosecute a scalper. The police don't regard this as a real 
crime. They regard this as a victimless crime. I can't tell you how 
many times that we have sat with attorneys general, different law 
enforcement agencies, and different regulatory bodies to try and 
address this problem, but everybody prioritizes what they view as 
important issues, and they don't see this as that compelling. 

Ms. WooLSEY. Ms. Rotnman, you looked like you wanted to re- 
spond to that, too. 

Ms. Rothman. The building spends hundreds of thousands of 
dollars in an attempt to control the scalping because they have a 
myriad of other effects on the building. If the tickets aren t sold in 
advance, they are roaming around through your parking lot. They 
are often sold by unsavory people in the parking lot who intimidate 
your customers. 

If you have tickets left to be sold, your inventory sits in the box 
office while they are selling in the parking lot. So it has been some- 
thing that I have worked on since the day I came to the Forum, 
and I have seen all of that money and all of my efforts not result 
in any more control but of a business that grows year afler year, 
and when I have an opportunity to travel somewhere else to a 
major event, I can pick out the scalpers in the lot because I have 
become so well acquainted with them over the years, so it is a mul- 
timillion, billion-dollar business. 

All we can hope to do is control it. Yes, they have no risk. We 
have the risk. They have no risk. 



128 

Mr. Rosen. Madam Chairman, our company helped Garth 
Brooks in pursuing an antiscalping and antibroker law in Ten- 
nessee. Our counsel has also often worked with various State agen- 
cies, both in drafting these laws and trying to work with them to 
police this infraction. 

Ms. WoOLSEY. OK, good. Mr. Horn, do you have any other ques- 
tions? 

Mr. Horn. No. 

Ms. WooLSEY. Well, we would like to thank you for coming and 
being here through the entire hearing, and we may have some ad- 
ditional questions in writing, and we will hold this hearing open for 
an additional week and thank you. The hearing is adjourned. 

Mr. Rosen. Thank you for the opportunity to speak. 

Ms. RoTHMAN. Thank you. 

[Whereupon, at 1 p.m., the subcommittee adjourned, to reconvene 
subject to the call of the Chair.] 

[Additional information submitted for the record follows:] 

Additional Information SuBMirrED by Ned S. Goldstein, Vice President and 

General Counsel, Ticketmaster 

Pursuant to your request, and to my discussions with Mark Brasher of your office, 
I have compiled a list, for the top 50 populated cities in the United States (per the 
1994 World Almanac), of various venues with which Ticketmaster does and does not 
do business on an exclusive basis. 

As Mr. Brasher and I agreed, the list is not exhaustive, but rather it details sev- 
eral of the more well known or larger venues in each city, indicating where 
Ticketmaster has an exclusive ticketing agreement with said venues for outlet and 
telephone sales. The list was compiled in response to your request, as no such list 
existed prior to your request. 

Please note that while Ticketmaster may not have an exclusive contract with a 
particular venue, in certain instances it may still be the ticketing agent for an occu- 
pant of the venue. For example, in Buffalo, New York, Ticketmaster does not have 
an exclusive contract with tne Buffalo Memorial Auditorium, however, it does the 
ticketing for the Buffalo Sabres who play their home games at such venue. 

I thiiuc you will agree that the list is factual proof that many of the allegations 
against Ticketmaster are unfounded and spurious. 

If you have any questions or conmients regarding the enclosed, please do not hesi- 
tate to contact me. 

Exclusive Contracts 

NEW YORK. NEW YORK (1) 

Stadiums: 

Shea Stadium « No 

Yankee Stadium No 

Giants Stadium Yes 

Downing Stadium No 

National Tennis Center No 

Forums, Major Arena, etc.: 

Madison Square Garden Yes 

Byrne Meadowlands Arena Yes 

Nassau Coliseum Yes 

Carnegie Hall No 

Shubert Theatres No 

Lincoln Center No 

LOS ANGELES (2), LONG BEACH (32), CAUFORNIA 

Stadiums: 

Rose Bow) No 

Los Angeles Coliseum Yes 

Dodger Stadium No 

Anaheim Stadium No 

Santa Bartwra County Bowl No 



129 

Exclusive Contracts — Continued 

Forums, Major Arena, etc.: 

Great Western Forum Yes 

Anaheim Arena Yes 

LA Sports Arena „_ Yes 

Hollywood Bowl No 

Long Beach Arena - Yes 

CHICAGO. ILUNOIS (3) 

Stadiums: 

Soldier Field _ No 

Comiskey Park „ Yes 

Wrigley Field __ __ Yes 

Dyche Stadium No 

Forums, Major Arena, etc.: 

Rosemont Horizon Yes 

Poplar Creek _ Yes 

World Music Theatre Yes 

Chicago Civic Opera House No 

Chicago Orchestra Hall No 

HOUSTON. TOAS (4) 

Stadiums: 

Astrodome Yes 

Rice Stadium „ No 

G. Raleigh White Stadium (Texas A & M) „ No 

Butler Stadium No 

Forums, Major Arena, etc.: 

Summit Arena Yes 

G.R. Brown Convention Center No 

Astro Arena Yes 

Houston C.C.C. Coliseum No 

PHILADELPHIA, PENNSYLVANIA (5)— NONE ' 

SAN OIEGO. CAUFORNIA (6) 

Stadiums: 

Jack Murphy Stadium „ No 

Aztec Bowl (SD State) „ No 

Lake Elsinore Diamond _ No 

DeVore Stadium (Southwestern College) „ No 

Forums, Major Arena, etc.: 

San Diego Sports Arena Yes 

San Diego Convention Centre Yes 

Starlight Bowl „ „ No 

Emtiarcadero Marina South _„ No 

DETROIT. MICHIGAN (7) 

Stadiums: 

Tiger Stadium „ „ Yes 

Pontiac Silverdome Yes 

University of Michigan Stadium (Ann Art»r) No 

Forums, Major Arena, etc.: 

Cotx) Arena _ Yes 

Joe Louis Arena „ „ Yes 

Palace of Auburn Hills Yes 

Pine Knob „ Yes 

DALLAS, TEXAS (8) 

Stadiums: 

Texas Stadium No 

Cotton Bowl „ No 

Forums. Major Arena, etc.: 

Starplex Amphitheatre Yes 

Reunion Arena No 

PHOENIX (9) and TUCSON (33). ARIZONA 
Stadiums: 

Sun Devil Stadium (ASU) No 



130 

Exclusive Contracts — Continued 

Arizona Stadium (U of A) No 

NAUSkydome No 

Peoria Sports Complex Yes 

Scottsdale Stadium No 

Forums, Major Arena, etc.: 

Veterans Memorial Coliseum No 

America West Arena No 

ASU Activity Center No 

McKale Center No 

Tucson Convention Center No 

SAN AffTONIO, TEXAS (10) 

Stadiums: 

Alamodome* No 

Forums, Major Arena, etc.: 

Hemisfair Arena * No 

Sunken Gardens No 

SAN FRANCISCO (14)/DAKLAND (39)/SAN JOSE (11), CAUFORNIA— NONE ' 

INDIANAPOLIS. INDIANA (12) 

Stadiums: 

Bush Stadium No 

Hoosier Dome Yes 

I.U.P.U.I Stadium No 

Forums, Major Arena, etc.: 

Market Square Arena Yes 

Deer Creek Yes 

Hinkle Fieldhouse No 

WASHINGTON, D.C. (19)/BALT1M0RE, MARYLAND (13)— NONE ^ 

JACKSONVILLE. aORIDA (15) 

Stadiums, Forums, Major Arena, etc.: 

Gator Bowl No 

Florida Theatre Yes 

Jacksonville Coliseum Yes 

Jacksonville Civic Auditorium Yes 

COLUMBUS. OHIO (16) 

Stadiums: 

Ohio Stadium No 

Cooper Stadium Yes 

Forums, Major Arena, etc.: 

Polaris Amphitheatre Yes 

St. John Arena No 

MILWAUKE, WISCONSIN (17) 

Stadiums: 

Milwaukee County Stadium No 

Wisconsin State Fairgrounds No 

Camp Randall Stadium (Madison) No 

Lamljeau Field — Green Bay No 

Forums, Major Arena, etc.: 

Bradley Center Yes 

Alpine Amphitheatre Yes 

Marcus Amphitheatre Yes 

Dane County Expo Center No 

MEMPHIS, TENNESSEE (18) 

Stadiums: 

Liberty Bowl No 

Forums, Major Arena, etc.: 

Pyramid/Mud Island Yes 

Mid South Coliseum Yes 



* Note. An sdusMe contract with the CMy ol San Antonio is currently beinj nejotiated. 



131 

Exclusive Contracts — Continued 

BOSTON. MASSACHUSETTS (20) 

Stadiums: 

Fenway Park No 

Foxboro Stadium _ Yes 

Alumni Held (BC) „ No 

Harvard Stadium No 

Fiton Field (Holy Cross) „ No 

Forums, Major Arena, etc.: 

Boston Garden _ Yes 

Centrum (Worcester) Yes 

Great Woods F/T Performing _ Yes 

Tanglewood , Yes 

Boston Opera House _ „ No 

SEATTLE (21)/rAC0MA. WASHINGTON 

Stadiums: 

Seattle Center Memorial Stadium „..„ No 

King Dome No 

Husky Stadium No 

Cheney Stadium No 

Forums, Major Arena, etc.: 

Seattle Center Coliseum No 

Tacoma Dome Yes 

Puyallup Fair Grandstand No 

Hec Edmundson Pavilion (UW) No 

EL PASO. TEXAS (22) 

Stadiums: 

Sun Bowl Stadium „„ No 

Special Events Center at UTEP „ No 

Forums, Major Arena, etc.: 

El Paso County Coliseum „„ Yes 

El Paso Con. Center Hall „ Yes 

McKelligon Canyon Amphitheatre No 

NASHVILLE/DAVIDSON. TENNESSEE (23)— NONE* 

aEVELAND. OHIO (24) 

Stadiums: 

Cleveland Municipal _„ No 

Jacobs Field „ Yes 

Rubber Bowl (Akron) No 

Forums, Major Arena, etc.: 

Gateway „ Yes 

Blossom Yes 

Playhouse Square Center: 

Palace Theatre No 

State Theatre No 

NEW ORLEANS. LOUISIANA (25) 

Stadiums: 

Superdome Yes 

Ted Gorm ley Stadium No 

Forums, Major Arena, etc.: 

UNO Lakefront Arena Yes 

Audubon Zoo Amphitheatre No 

Marconi Meadow No 

DENVER. COLORADO (26) 

Stadiums: 

Mile High Stadium No 

Folsom Field (Boulder) No 

Falcon Stadium (Colorado Springs) „ No 

Hughes Stadium (Ft. Collins) „ No 

Forums, Major Arena, etc.: 

McNichols Arena No 

Coors Event Center (Boulder) _„ No 



132 

Exclusive Contracts — Continued 

Denver Coliseum No 

Red Rocks Amphitheatre No 

Fiddler's Green Amphitheatre Yes 

AUSTIN, TEXAS (27)— NONE' 

FORT WORTH, TEXAS (28) 

Stadiums: 

Amon G. Carter Stadium No 

Forums, Major Arena, etc.: 

Tarrant Co. Convention Center No 

Will Rogers Memorial Coliseum No 

OKLAHOMA CITY, OKLAHOMA (29)— NONE* 

PORTIANO, OREGON (30)— NONE ' 

KANSAS Cirr, MISSOURI (31) 

Stadiums: 

Arrowhead Stadium No 

Kauffman Stadium No 

Forums, Major Arena, etc.: 

Kemper Arena* No 

Municipal Auditorium No 

Sandstone '.. Yes 

ST. LOUIS, MISSOURI (34)— NONE 

Stadiums: 

Busch Stadium No 

Forums, Major Arena, etc.: 

Riverport Amphitheatre No 

Keil Arena No 

St. Louis Arena No 

CHARLOTTE. NORTH CAROLINA (35) 

Stadiums: 

American Legion No 

Forums, Major Arena, etc.: 

Charlotte Coliseum Yes 

Blockbuster Pavilion Yes 

Grady Cole Center No 

ATLANTA, GEORGIA (36) 

Stadiums: 

Atlanta Fulton Company Stadium .'. No 

Forums, Major Arena, etc.: 

Georgia Dome Yes 

The Omni Yes 

Lakewood Amphitheatre Yes 

Fox Theatre Yes 

Chastain Park No 

Atlanta Civic Center No 

Georgia World Congress Center No 

NORFOLK/PORTSMOUTH/NEWPORT NEWS, VIRGINIA BEACH, VIRGINIA (37) 

Stadiums: 

Harbor Park No 

Forums, Major Arena, etc.: 

Scope Yes 

Hampton Coliseum Yes 

ALBUQUER(3UE, NEW MEXICO (38)— NONE* 

PITTSBURGH. PENNSYLVANIA (40) 

Stadiums: 

Three Rivers Stadium Yes 

Pittsburgh Stadium No 



'Ticketmaster has an exclusive agreement with the City to operate the facility bat office on the City's behalf, but does not have an exclu- 
sive facility agreement with the City for outlet and telephone sales. 



133 

Exclusive Contracts — Continued 

Forums, Major Arena, etc.: 

Pittsburgh Civic Arena No 

Star Lake Amphitheatre - Yes 

SACRAMENTD/STOCKTQN. CAUFORMA (41)— NONE* 

MINNEAPOUS AND ST. PAUL. MINNESOTA (42) 

Stadiums: 

HHHMetrodome No 

Municipal Stadium - No 

Forums, Major Arena, etc.: 

Target Center - Yes 

Met Center ~ No 

Williams Arena - No 

St. Paul Civic Center Yes 

TULSA. OKLAHOMA— (43)-^«0NE 

Stadiums: 

Oral Roberts Univ.— Johnston Stadium — No 

McClain Stadium No 

Webster Stadium No 

Lafortune Stadium ~ No 

S.E. Williams Stadium No 

Univ. of Tulsa — Skelly Stadium No 

Forums, Major Arena, etc.: 

Tulsa PAC. — Chapman Music Hall _ No 

Reynolds Amphitheater No 

Expo Square — Pavilion No 

Tulsa Convention Center Arena - No 

Oral Roberts Univ.— Mabee Center No 

HONOLULU. HAWAII (44)— NONE 

Stadiums: 

Aloha Stadium - No 

Forums, Major Arena, etc.: 

Neal Blaisdell Center— Concert Hall — — No 

Neal Blaisdell Center— Waikiki Shell No 

Neal Blaisdell Center— Arena __ « No 

aNCINNATl. OHIO (45) 

Stadiums: 

Riverfront Stadium — « No 

Nippert Stadium « Yes 

Forums, Major Arena, etc.: 

Riverfront Coliseum No 

Riverbend Yes 

MIAMI, FLORIDA (46) 

Stadiums: 

Joe Robbie Stadium - : Yes 

Orange Bowl No 

Miami Baseball Stadium No 

Forums, Major Arena, etc.: 

Miami Arena Yes 

AT & T Amphitheatre No 

Gusman Center for the Performing Arts _ Yes 

FRESNO/VISALIA. CAUFORNIA (47)— NONE "» 

OMAHA. NEBRASKA (48) 

Stadiums: 

Music Hall Yes 

Orpheum Theater Yes 

Univ. of Nebraska — Fieldhouse No 

Univ. of Nebraska — Al Caniglia Field No 

Rosenblatt Stadium „..„ Yes 

Forums, Major Arena, etc.: 

Aksarben Coliseum — Arena No 



BOSTON PUBLIC LIBRARY 




134 3 9999 05982 458 9 



Exclusive Contracts — Continued 

Omaha Civic Auditorium Yes 

TOLEDO, OHIO (49) 

Stadiums: 

Univ. of Toledo — Glass Bowl Stadium No 

Forums. Major Arena, etc.: 

John F. Savage Hall No 

Masonic Auditorium Yes 

Toledo Sports Arena Yes 

BUFFALO, NEW YORK (50) 

Stadiums: 

Rich Stadium No 

Forums, Major Arena, etc.: 

Buffalo Memorial Auditorium No 

> The entity operating In Philadelphia, Pennsylvania as 'Ticketmaster", Is not owned, operated or managed by TIckelmaster Holdings Group 
or its atflllales. It is merely a licensee o< the '7ickelniaster System" and mark. Ticketmaster Holdings Group and Its attiliates do not have 
any acluslve ticketing contracts with any stadiums, arenas, etc in Philadelphia, Pennsylvania. 

'The entity operatmg as "Bass Tickets" in San Francisco, Oakland and San Jose, Calitornia, Is not owned, operated or managed by 
Ticketmaster Holdings Group or Its attiliates. It is merely a licensee ot the "Ticketmaster System" and mark. Ticketmaster HokJIngs Group and 
Its attiliates do not have any exclusive ticketing contracts with any stadiums, arenas, etc. In San Francisco, Oakland or San Jose, California. 

'The entity operating as 'Ticketmaster" in Washington, D.C and BaHlmore, Maryland is not owned, operated or managed by Ticketmaster 
Hoktings Group or Its attiliates It is merely a licensee ot the 'Ticketmaster System" and mark. Ticketmaster Hckjings Group and Its attiliates 
do not have any exclusive ticketing contracts with any stadiums, arenas, etc In Washington, DC or Baltimore, Maryland. 

*The entity operating as 'Ticketmaster" in Nashville/Davidson, Tennessee is not owned, operated or managed by Ticketmaster Hoktings 
Group or Its attiliates It is merely a licensee at the 'Ticketmaster System" and mark. Ticketmaster Holdings Group and Its attiliates do not 
have any exclusive teketing contracts with any stadiums, arenas, etc. in Itashvllle/Davldson, Tennessee. 

'The entity operating in Austin, Texas as 'Ticketmaster", is not owned, operated or managed by Tictetmaster Hokllngs Group or Its attili- 
ates. It Is merely a licensee ot the 'Ticketmaster System" and mark Ticketmaster Holdings Group and Its attiliates do not have any aclusrve 
ticketing contracts with any stadiums, arenas, etc in Austin. Texas 

■The entity operating as 'Ticketmaster" in Oklahoma City. Oklahoma Is not owned, operated or managed by Ticketmaster Holdings Group or 
its attiliates It is merely a licensee ot the 'Ticketmaster System" and mark. Ticketmaster Holdings Group and Its attiliates do not have any 
exduswe ticketing contracts with any stadiums, arenas, etc in Oklahoma City, Oklahoma. 

'The entity operating as "G I. Joe's Ticketmaster" In Portland, Oregon Is not owned, operated or managed by Ticketmaster Hokllngs Group 
or Its attiliates It is merely a licensee of the 'Ticketmaster System" and mark. Ticketmaster Holdings Group and its attiliates do not have 
any eiclusive ticketing contracts with any stadiums, arenas, etc. In Portland, Oregon. 

*The entity operating as 'Tictetmaster" In Albuquerque, New Mexico is not owned, operated or managed by Ticketmaster Holdings Group or 
its attiliates It is merely a licensee ot the 'Ticketmaster System" and mark Ticketmaster Holdings Group and Its attiliates do not have any 
exclusive ticketing contracts with any stadiums, arenas, etc In Albuquerque. New Mexico. 

■The entity operating as "Bass Tickets" In Sacramento and Stockton, Calitornia s not owned, operated or managed by Ticketmaster Hold- 
ings Group or Its attiliates It is merely a hcensee at the 'Ticketmaster System" and mark Ticketmaster Holdings Group and its affiliates do 
not have any excluswe ticketing contracts with any stadiums, arenas, etc in Sacramento or StocMon. California 

>°The entity operating as "Bass Tickets" in Fresno and VIsalia, California is not owned, operated or managed by Ticketmaster Holdings 
Group Of Its affiliates It is merely a licensee of the "Ticketmaster System " and mark Ticketmaster Holdings Group and its affiliates do not 
have any exclusive ticketing contracts wrth any stadiums, arenas, etc in Fresno or Visalia. California 



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